Gentlemen

Thank you for your reply.  The realtor that is offering the "credit" is the buyer's agent, under a buyer's agency agreement.  The funds that he is offering as a credit are part of the commission being paid by seller under an exclusive listing agreement to the listing agent who then will 'split" that commission with buyer's agent pursuant to their agreement.  So, in fact, the funds are coming exclusively from the seller and as such, in my opinion, should be considered a seller contribution to buyer's closing cost.

I have advised the parties that unless the lender has specifically authorized a seller credit to buyer's closing cost this credit will not be allowed.  Neither the buyer nor his agent have fought me on this.  So, it is likely that what will actually happen is that the buyer's agent will give the buyer this "credit" outside of closing.  Naturally, I cannot prove or disprove this assumption, so......; but at least my HUD will be in accordance with the lender's instructions to me.