Many times we receive questions on what type of documentation is required in order for a client to receive CGMA closing cost assistance.
The most important document to include with the request is the HUD-1 (pdf) Settlement Statement.
Note: Good Faith Estimates and Preliminary HUD-1 statements are not acceptable support documents for a closing cost loan, as figures from these statements can change prior to the actual closing.
What items should a Representative look for on a HUD-1 statement?
The first page of the Settlement Sheet is broken down into a summary of the borrower's (buyer) transactions on the left side and a summary of the seller's transactions on the right. The second page is divided into those costs that are paid from or to the borrower, and those costs that are paid from or to the seller.
Line 103 - Total settlement charges to the borrower; this is obtained from adding up all of the costs on the second page and is also referenced in Line 1400.
Line 303 - The figure here is the total amount of funds that borrower must bring to settlement in order to close.
A CGMA Closing Cost Loan may not exceed the lower of the amounts shown on lines 103 and 303, nor may it to exceed $6000.
Lines 501-509 - Itemizes all reductions in the amount that Seller would otherwise walk away with from the settlement table, such as existing mortgages that must be paid off and Seller's settlement charges (as listed on Line 1400 on page 2).
Line 603 - This is the total amount of funds that Seller nets on the transaction.
If the seller owes at closing, CGMA can provide a CGMA loan for up to $6000 towards closing costs that pertain to the settlement charges alone, not on the loss on the sale price of the home.
Please remember that all requests for closing cost assistance must be forwarded to CGMA-HQ for approval.
You give valuable time to assist CGMA clients and it is much appreciated!
Please let CGMA-HQ know (703) 875-0404 or toll free (800) 881-2462 or email: ARL-DG-CGMA@uscg.mil if there is any way we can support your efforts as you serve your shipmates through CGMA.