When Can You Use a Non-Realty Items Addendum Per Lending Guidelines

Non-Realty Items

Per lending guidelines, Interested Parties to a transaction include, but are not limited to, the property seller, the builder/developer, the real estate agent or broker, or an affiliate who may benefit from the sale of the property and/or the sale of the property at the highest price possible. A lender or employer is not considered an interested party to a sales transaction unless it is the property seller or is affiliated with the property seller or another interested party to the transaction.


Sales Concessions

Sales concessions are IPCs (Interested Party Contributions) that take the form of non-realty items. They include cash, furniture, automobiles, decorator allowances, moving costs, and other giveaways, as well as financing concession that exceed limits. Consequently the value of the sales concessions must be deducted from the sale price when calculating LTV and combined LTV ratios for underwriting and eligibility purposes (in other words, the value will be subtracted from the value of the property therefore causing a Loan to Value Issue which will not allow the mortgage to close.


Below you will see what is NOT allowed in Non-Realty Items and what IS allowed per Lending Guidelines.

NOT Allowed

IS Allowed

  • Car
  • Boat
  • Riding Lawn Mower
  • Furniture or Television or Computer Equipment
  • Lawn Furniture
  • Washer/Dryer
  • Window treatment or other items
  • Decorating allowances
  • Repair allowances
  • Media Equipment
  • Moving costs, and other costs
  • Excess Rent Credit
  • Sales commissions paid by an interested 3rd party on a borrower's present residence.
  • Range
  • Refrigerator
  • Dishwasher
  • Carpeting


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