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Often companies will agree to contribute money to assist in relocating. This is typically acceptable so long as it is properly documented. An owner-occupant borrower may use funds provided by his or her employer to pay part of the closing costs or to supplement his or her financial reserves. The borrower generally must use his or her own funds to make the required minimum cash down payment, although that down payment can be supplemented with financial assistance from the borrower's employer. Assistance from the borrower's employer must come directly from the employer; it may not be provided by a company-affiliated credit union.
For most mortgages, the employer's financial assistance for either closing costs or the down payment may be in the form of a grant; a direct, fully repayable second mortgage or unsecured loan; a forgivable second mortgage or unsecured loan; a deferred payment second mortgage or unsecured loan; or mortgage payment assistance.
The lender must review the employer's assistance program to verify that the program is an established company program, not just an accommodation developed for an individual employee. The lender also must obtain documentation that describes the terms of any loan agreement and other employee assistance being offered to the borrower (such as relocation benefits or gifts), including the employer's written verification of the dollar amount of the assistance. When the employer's assistance is funded before settlement, the lender must confirm the borrower's receipt of the funds.
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