Proceeds from a purchase transaction may not be used to give the borrower cash back other than the following:
- an amount representing reimbursement for the borrower’s overpayment of fees and charges, including refunds that may be required in accordance with certain federal laws or regulations. The settlement statement must clearly indicate the refund, and the loan file must include documentation to support the amount and reason for the refund; and
- a legitimate pro-rated real estate tax credit in locales where real estate taxes are paid in arrears.
For additional information, see B2-1.3-01, Purchase Transactions.