Is a tax service fee allowed to be paid by a borrower under FHA guidelines?

Under FHA guidelines, a tax service fee is indeed allowed to be included as part of the monthly payments. This is because the FHA recognizes the importance of ensuring that property taxes are paid on time to avoid any tax liens that could jeopardize the loan's security. By permitting the fee to be included in monthly payments, the FHA helps streamline the financial process for borrowers, making it easier for them to manage their finances without needing to pay the fee as a lump sum up front. This approach aligns with goals of accessibility and affordability in housing finance, thus supporting the overall mission of the FHA in promoting homeownership.

In contrast, other choices suggest limitations on how the fee can be handled, which do not align with the flexibility provided by FHA regulations regarding tax service fees.