payout one .com

has anyone heard of this website or used it. i talked with my mortgage broaker today and he was telling me this company will help buyers with the assistance of money down on a deal but they charge 10% on that money and they get that money back with interest the day of closing. i guess the seller pays the 10% and its considered a marketing strategy for the seller to sell their house quicker. this program also helps investors get in with very little cash out of their pocket. any help on this, i really dont understand it but it sounds very beneficial.

There are quite a few DPA (down payment assistance) grants available to both homeowners and investors alike and they are all fundementally the same—The seller funds the proceeds of the DPA and or down payment…


Scott Miller

so is this legal. everything goes on the hud on the sellers side. banks want to see that these buyers have the cash but they really dont, so they are stuping the bank right? this company has to make a killing make 10% on their money in less then 2 days. have you used them?

The use of DPA grants is legit (for now anyway—IRS was poking around earlier this year and tried to overturn them and now FHA is thinking about squashing them for use with Fha loans) but I can’t speak to this particular service provider.


Scott Miller

they said that they cant do fha loans, the loan officer told me that it is all up to them to make this work. they are the ones who set all this up. the company does not talk to anyone but the loan officer, so if things were fishy it would be on the loan officer right and not the company, since they are just lending money. also everything is on the hud and shows up on the sellers side as a payoff to the company. i just see it as if its on the hud there cant be any wrong doing.

I looked into Payout one several months back and found that their system is almost exactly the same as the grant programs.

However, when I inquired if the company had ever ran this past Fannie Mae or any goverment organazations they said no.

What they did was looked at the “written guidelines” published by Fannie Mae and set up away around what was worded in regards to using programs like this.

My research with a couple lenders resulted in that they werent sure how they would handle this if I sent one in.

So far, I’ve opted not to use them but have kept there info bookmarked.

Any investors interested in using this program on a test/trial basis?

I spoke to a manager in the Fannie Mae Anti-Fraud department this afternoon. We went over the Payoutone prorgram which she was already familiar with. Her opinion was to stay clear of this company.

After the call I went back and read some of the info again on their website. You can see through this link that the company is trying use this letter to establish credibility.
Looking at the letter you can see on page 7 item #3 that Dr. Lacefield acknowledges reviewing generally accepted FHA guidelines which allow for down payment programs. What concerns me is that this system claims to be compatible with conventional products. If using conventional products then ultimately should not have Fannie Mae been contacted to write such a letter.

Also this letter only addresses 1 issue; that being if RESPA and Reg X could be in violation from “giving anything of value”. The author concludes with his opinion that it does not but gives no thoughts on whether or not this method is acceptable practice for non-FHA Finacing.

In short, it is a tool to circumvent lender guidelines. If the buyer does not have funds to qualify for closing, he cant just create those funds by shuffling around the sellers equity.

Dont believe I’ll be allowing my clients to choose this option unless more data from Fannie Mae becomes available to support it.

Nice posts Ben, very informative.

I concur with Rich. Great job Ben. Thank you for taking the time to call and research that program. From time to time we get people who stop in our office and try to get myself and the other brokers to try out some product like this, but they always seemed sketchy. Now I won’t feel bad giving them a clear and concise NO!


Beware of DPA companies who provide DPA in the form of a cashier’s check made payable to the title company from the buyer’s bank with the buyer shown as the remitter. The money never is deposited into the buyer’s bank even though it appears it has originated from that account. That is a no no.

My company, provides DPA to buyers of residential and commercial properties nationwide and funds daily. We are paid from the seller’s bank “after” closing. WE fund the buyer’s bank account direct for the amount needed. Buyer is taxed for the amount requested. It is not a loan. There are no liens or promissory notes. No fake marketing invoices are submitted to the title company.

DPA is here to stay and will get better as markets worsen and more emphasis is placed on property values and equity. does not advertise as DPA…but CMPA. What is that, and are there other similar companies? Is CMPA legal?

So what is the difference in doing this and simply having a buddy (not part of the transaction) wire the money into the buyer’s account the day of closing? It all kind of seems shady, but if it is legal could be very helpful. I have seen many buyers that could make the payments but not come up with the downpayment.

These companies and their services are legitimate and technically legal at this time.

The big issues with these “down payment programs” such as PayOutOne or DP Funder are two fold really.

1) You have to use a subprime lender that doesn’t source or season the downpayment. FNMA and other conventional lenders won’ t touch this sort of thing. The number of subprime lenders that will are rapidly disappearing also.

2) While the transaction does only show up on the seller’s side as say “marketing assistance” or something to that affect, the lender STILL has to approve the proposed HUD statement. We recently had a deal die because the underwriters saw a huge payout on the seller’s side and it raised a red flag. They killed the deal.


Payoutone claimes that their program can work with Fannie and Freddie because they are a “for profit” organazation.

I’d go back and make sure you understand how they set this up. It’s not like a FHA DPA program at all. It involves the buyer working for them and selling a service so the seller so that the income produced can be used as down payment funds. Since earned income doesnt need to be seasoned with Fannie they say it’s legite. Fannie Mae seems to think otherwise as I’m sure would most lenders if the broker explained the transaction.

Of course it’s possible that the information I am getting from two different POO reps is not accurate, it’s my understanding that POO doesn’t use the “earned income” method like DP Funder does. My reps claim that you HAVE to use a lender that doesn’t source or season the downpayent…and I know of no Fannie lenders that do that. DP essentially pays the borrower a “commission” of one sort or another…earned income in other words…that may be different but I stand by my contention that HUD approval is still difficult. Chase said “no thanks”.