In certain situations, the Federal National Mortgage Association will allow home lenders to help borrowers with some of the cash needed to close on a home-purchase transaction.

Washington-based Fannie Mae has clarified that lender-sourced contributions for closing costs and prepaid fees that are the borrower’s responsibility will now be permitted.

There is no limit to how much a lender can contribute as long as the total contributed doesn’t exceed the amount of borrower-paid closing costs and prepaid fees.

Source: Mortgage Daily