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Ques concerning FHA/3% charitable donation....


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We got the house we wanted! Apparently the mortgage broker got an automatic approval and *swears* that there will be no surprises at closing regarding settlement on some charge offs, etc. This is great as we have been financed for the entire purchase price. Here is my question:

The builder is contributing $4439 towards closing costs (inventory home and I know they are anxious to sell it). The broker says that we can apply for the 3% "donation" through Ameridream but Choice Homes (the builder) charges a 20%! fee for doing this. So our $3000 donation would end up costing us $3600 before adding it to the loan. As an alternative we can pay $3600 down and the builder, who would then max out at $3800 in closing costs would "allow" us the additional $600 in upgrades. I am teetering back and forth in whether or not it makes more sense for US to pay the $3600 down (which is a nice chunk of our savings considering we still need to buy fridge, blinds, mower, etc....) and finance $116300 or do we use the charitable $3000 down and roll the $3600 or is it $600 into the note? We locked in at 6.25%. I thought we would be adding the $3600 back into the note, the builder says the $3000 is applied towards the $120000 note and we add the $600 in fees so it would be $117600. Does this make sense? HELP!?!?! :?:

The broker's office is closed right now so I have to wait until Monday morning to get a true understanding and make a decision concerning this. In the meantime I certainly would appreciate any additional advice. If it is in fact a matter of financing $116300 (with OUR downpayment) or $117600 (with the Charitable downpayment, and $3600 still in our pocket....) I think I choose the latter. BUT I want to ensure I understand this. All advice appreciated.

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