NAR Settlement - Agency Information and Closing Costs

There are a lot of questions regarding the NAR Settlement and real estate commissions, so I wanted to provide some of the information previously sent out to you again and allow you to have it all in one place. Additionally, this email provides information about what the agencies consider to be closing costs (see way below).

Please note, several of the Housing Finance Authorities/Down Payment Assistance programs will not allow their DPA funds to be used to pay real estate commissions – be sure to confirm with the housing agency for acceptability if using the funds to pay those fees.

Here is information our Compliance team has provided on the topic:

Commissions have always been a closing cost and that has not changed as a result of allocating to other parties in the transaction. Commissions and related agent fees are a settlement service fee due to a settlement service provider. Those fees must be disclosed. Credits can be applied in normal course and in accordance with the product and agency limits.

Information/Announcements by Agency:

Fannie Mae and Freddie Mac sent out notices that basically mirrored the information provided by FHA. VA put out a circular to allow the fee to be paid by the borrower and USDA now allows their loans to follow industry standards. You can read about it at the following links or in the screen shots below.

Click Here for information from Fannie Mae