$$$ at closing?

I was wondering what the best way to go about receiving cash back from closing from a no money down purchase?

Lets say you have a house appraised at $200.000 and the owner agrees on $170.000. Whats the best way to go about getting the difference back at closing? ie: have the purchase price $190.00 and inside the contract state “seller will credit buyer with $20.000 at closing for repairs”.

But would conventional lenders loan on an purchases with those terms or would you be stuck dealing with hard money lenders?

It depends on the amount and the rules of that particular bank. Typically on a regular mortgage, banks will allow 2-3% cash back. This is usually enough to cover closing costs. It’s tough to get more than that. You could also do a side agreement that’s not refected in the Hud-1 for money on repairs.

Also the scenario you outline is a little backwards. You make the $190k offer with the contingency that the seller credits buyer $20k at closing. As long as it appraises for over 190k, the bank has no problem lending on it. You stick in the 20k back at closing in the P&S agreement. Bank sees a copy and it’s disclosed.

I suppose you could get into trouble for fraud if you were foreclosed on and the banks were wondering why and found out about cash back. No foreclosure, no problem.