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2. Creditworthiness Review
Change Date
Back to top7.2.cc. Additional Credit Review Requirements
The table below lists additional creditworthiness review requirements for assumptors.
| Requirement | Description |
|---|---|
|
Credit Review |
The lender reviews the assumptor's credit, if the mortgage being assumed is held or serviced by a DE approved lender. |
|
Secondary Financing |
Secondary financing or other borrowed funds may be used by the assuming borrowers, provided the repayment terms are
|
|
Seller Contributions |
Cash contributions from the seller in order to facilitate an assumption are not acceptable. The existing mortgage balance must be reduced by the amount of the contribution. However, the seller may pay the assumptor's normal closing costs, including processing fees and credit report fees, with no reduction to the mortgage. |
|
Documentation Requirements |
For information on the documentation requirements for the creditworthiness review of assumptions, see HUD 4155.2 3.C. |
|
Assumptions by Other Legal Entities |
If a creditworthiness review is required, an assumption solely in the name of a corporation, partnership, sole proprietorship, and trust, is not acceptable. |
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