What are the FHA allowable closing costs?


The FHA allowable closing costs are fees to be paid by the borrower beside the down payment that is required. Unlike conventional loans, where mark-ups are allowed, FHA loans do not allow mark-ups to be included in the closing costs. Only the cost of the service is allowed.

FHA Allowable Closing Costs

Origination fee - this will vary between 1% and 2% of the amount of the loan, depending in the FHA loan type.

Appraisal and credit report costs are charged as they are, no mark-ups on them are allowed.

Loan processing, opening escrow account and title search and insurance, as well as other loan related costs are charged as per the pure cost of the service.

In FHA loans the seller is allowed to contribute up to 6% of the purchase amount towards buyer closing costs.

The Tax service fee does not count towards the FHA allowable closing costs.

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