Can discount points be financed on a 203(k) transaction?

The Mortgagee may finance a portion of the borrower-paid discount points not to exceed an amount equal to the discount point percentage multiplied by the total of Financeable Repair and Improvement Costs and Fees, Financeable Contingency Reserves and Financeable Mortgage Payment Reserves (if applicable). 

For additional information see Handbook 4000.1 II.A.8.a.vi.(G)(2) and II.A.8.a.vii.(F)(2) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04535