Finance
In Louisiana, a 'seller-assisted down payment' arrangement where the seller contributes to the buyer's down payment has historically been:
AEncouraged by FHA to help first-time buyers
BProhibited or restricted by FHA because it artificially inflates sale prices and undermines the purpose of the down payment requirement✓ Correct
CStandard practice in all Louisiana markets
DRequired for HUD-approved properties
Explanation
FHA prohibits down payment assistance funded by the seller (or entities with a financial interest in the transaction) because it creates incentives to inflate the sale price — effectively eliminating the risk-reduction benefit of the down payment. Gifts from non-profit organizations and family members may be acceptable.
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