A builder is offering cash back if I buy his house – can he do that?
Builders (sellers, investors, etc.) frequently try to entice buyers into a transaction with cash back at closing, but in most (all) jurisdictions, it is a form of mortgage fraud and won't fly. Factually, while they might succeed getting you into a transaction, in reality the bank / mortgage lender will simply reduce the purchase price by the cash back amount, which will serve to increase your down payment requirements by the same amount. The reason is that if the seller is willing to give you cash back, then they would be willing to sell at a reduced price. So the real purpose of a cash-back offer is to entice/trick you into a transaction, which is not permitted and in fact illegal.