Comment Submitted by Eric Metzler

At first thought, reducing the allowable seller concessions to 3% sounded like a bad idea. Upon reading the charts, I can relate to why it may need to be done. It must be understood that this will make it harder for some people to obtain financing. While I have no "fix" in mind, I can't quite grasp how only allowing someone purchasing a $100,000 home to have $3,000 (3%) in seller concessions makes sense, when compared to allowing the person buying a $200,000 home can have $6,000. The person buying the more expensive home is basically rewarded in this scenario as closing costs easily run $4,000 and even up to $6,000 without problems. That of course is before setting up their escrow accounts. (can we allow people above a certain risk factor the ability to pay their taxes and insurance on their own? Maybe 700 credit score? 90% Loan to Value? Something?) Good luck in your decision making. From a business standpoint it's a pretty easy decision to reduce it. If possible, I would personally like to see it reduced to 4% (to match Veterans Affairs) Though it seems like we are punishing the person buying the $60,000 home (3%=$1,800) In that scenario $1,800 wouldn't come close to covering the actual closing costs. While that may not be your concern, it's the concern of every borrower. Let's get some innovation and figure out an incentive to the buyers who don't want/need ANY seller concessions. (example - buyer is not using seller concessions, they get a reduce up-front mortgage insurance as they present a lesser risk) I'm available any time to come up with some ideas on how to protect FHA's Capital Ratio while also having it match borrower wants and needs, AND "modernizing" FHA. While we don't want FHA to be adversely selected, we also need it to have a reason to be selected. Thank you,