Consumer complaint received 2025-08-13 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Closing disclosure or other related disclosures
Company: NAVY FEDERAL CREDIT UNION
State: TX

Complaint narrative:
Complaint Summary : I applied for a no down payment ( 0 % down ) Navy Federal Credit Union Homebuyers Choice loan to purchase a home in XXXX XXXX, TX. Initially, I elected to make a 3 % down payment after being told by the lender that this would ( 1 ) waive the 1.75 % funding fee normally tied to the 0 % down option, and ( 2 ) avoid a 0.375 % increase in interest rate. 

All Loan Estimates I received showed a nearXXXX cash to close amount because seller/builder credits were applied to both closing costs and the 3 % down payment. I relied on these representations in good faith in deciding to proceed with the loan, despite a higher interest rate than other available products, because the quoted cash-to-close was financially advantageous to me. 

XXXX : XX/XX/year> I received my original Loan Estimate, showing an estimated {$2200.00} cash-to-close. Based on this, I decided to proceed with NFCU and requested that the builder/seller amend my purchase contract to name NFCU in the seller contribution. 

XX/XX/year> After receiving the amended contract, I signed my Intent to Proceed with NFCU. 

XXXX I paid for home inspections and an appraisal. 

XX/XX/year> I received a revised Loan Estimate showing {$30.00} cash-to-close. 

XX/XX/year> NFCU uploaded an Initial Closing Disclosure showing a {$7200.00} cash-to-close. 

XX/XX/year> I contacted my loan processor, XXXX XXXX, by phone and email to ask about the large discrepancy between the Loan Estimate and the Closing Disclosure. He suggested applying the excess seller credits to a rate buydown. I said I was not interested and asked to escalate to a supervisor. 

XX/XX/year> XXXX XXXX, NFCU Mortgage Production Supervisor, called me. I asked about waiving both the lender fee and rate increase on a 0 % down loan to match the mortgage payment, cash-to-close, and total loan costs quoted in my Loan Estimate ( assuming my builder reduced the price/seller credit accordingly ). She said she would escalate. I also contacted my builder/seller to request a price reduction and researched whether the credits could be used for a 2-1 buydown. 

XX/XX/year> XXXX confirmed NFCU could not offer a 2-1 buydown and would not waive fees or the rate increase on a 0 % down loan. 

XX/XX/year> My builder/seller approved the change to decrease the home price and seller contribution by the excess credit amount. 

XX/XX/year> I informed NFCU I was closing under protest, then closed on the home later that morning. 

Key Issue : Less than two weeks before closing, NFCU disclosed for the first time that seller credits could not be applied toward a down payment something that was never clarified during the Loan Estimate stage. This correction caused my cash-to-close to increase by several thousand dollars, at a point when it was not feasible to change lenders without risking the purchase. 

NFCU has not acknowledged any error in their Loan Estimates. Their only suggestions for addressing the excess seller credits were to apply them toward rate buydowns which does not feel like prudent advice given that this is a high-interest loan with {$250.00} no-refinance rate drops available for the life of the loan. 

What I Believe Was Improper : The Loan Estimates inaccurately showed seller credits being applied toward the down payment, which is not allowed under mortgage rules. 

This was not disclosed or corrected until the Closin

g Disclosure stage, well past the point where I could reasonably change lenders without losing the property. I believe this constitutes a violation of TRIDs accuracy requirements fo
r Loan Estimates, as the rule barring seller credits from being applied to a down payment was known ( or should have been known ) by the lender at the time the Loan Estimates were issued.

The inaccura
te Loan Estimate materially influenced my decision to proceed with this loan product. 

XXXX XXXX :

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation