What can FHA home sellers, builders, and lenders do for the borrower?

FHA home sellers, builders, and lenders can indeed assist borrowers by paying some of the closing costs associated with obtaining a loan. This is particularly beneficial for borrowers as it helps to reduce the upfront financial burden, making homeownership more accessible. The FHA loan program encourages this type of assistance because it aims to promote homeownership, especially for first-time buyers and those with lower to moderate incomes.

The ability for sellers and builders to contribute to closing costs is often outlined in the terms of the sale and can be negotiated as part of the purchase agreement. This support can include covering fees such as appraisal fees, title insurance, and lender charges. By helping with these costs, sellers and builders make it easier for borrowers to secure financing and complete the purchase process.

In contrast, other options like guaranteeing the loan, offering a lower interest rate, or providing insurance for the loan do not fall under the typical responsibilities of sellers, builders, or lenders in the context of FHA loans. Loan guarantees and insurance are primarily the roles of the FHA and do not directly involve seller or builder contributions. Additionally, interest rates are typically determined by the market and the lender, rather than being influenced by the seller or builder.