B3-4.1-03, Lender Incentives (07/02/2025)

The lender may provide the borrower, either directly or through a third-party, with an incentive such as cash, a cash-like gift (for example, a gift card), or other item of value that is not a lender credit toward the loan transaction. The incentive may be offered on all loans as part of a promotion or lender program, provided that

• the incentive is not sourced from the loan transaction (for example, premium pricing),
• the borrower qualifies without consideration of the incentive (for example, the incentive cannot be considered borrower assets, used to reduce the payment on an outstanding credit card account, or included in maximum cash back to borrower at closing calculation), and
• no repayment is required.

When the lender is, or is affiliated with, an interested party to the transaction, the incentive must be treated as a sales concession.

Note: If the lender is providing a credit toward the borrower's closing costs and/or prepaid items, those funds are considered a lender contribution (not a lender incentive). See B3-4.3-06, Grants and Lender ContributionsB3-4.3-06, Grants and Lender Contributions, for information about lender contributions.