Writing an offer and trying to figure out how much the seller can contribute? Start with the loan type, then confirm the buyer’s financing and eligible costs.
Seller credits can help cover closing costs, prepaid expenses or an approved buydown. Here’s a quick reference to the standard purchase-loan limits.
Conventional seller concession limits
Primary residence or second home
| Buyer’s down payment* | Maximum contribution |
|---|---|
| Less than 10% | 3% |
| 10% to less than 25% | 6% |
| 25% or more | 9% |
| Investment propertyRegardless of down payment | 2% |
Calculated using the lower of the purchase price or appraised value, not the loan amount.
*Down-payment ranges assume no additional financing. Fannie Mae’s actual limits use LTV/CLTV: greater than 90% → 3%; 75.01%–90% → 6%; 75% or less → 9%. A second mortgage can change the applicable limit.
FHA, USDA and VA seller concession limits
FHA
6%Of the purchase price
For eligible closing costs, prepaid items and discount points.
USDA Guaranteed
6%Of the purchase price
Contributions must cover eligible program expenses.
VA
4%Of the property’s reasonable value
For specified concessions. Ordinary buyer closing costs and normal discount points are outside this limit.
The maximum isn’t always the amount the buyer can use
On a $300,000 conventional purchase with 5% down, the standard contribution limit is 3%, or $9,000, assuming the appraisal supports the price.
But if the buyer has only $7,000 in eligible costs, the remaining $2,000 doesn’t automatically become cash back. A credit must fit both the program limit and the allowable expenses. Conventional seller credits also cannot fund the buyer’s down payment or required reserves.
Can remaining seller credits help buy down the rate?
If the negotiated seller credit exceeds the buyer’s other eligible closing costs, some of that credit may be used toward discount points for a lower interest rate or an approved temporary payment buydown.
That needs to be arranged with the lender before closing. The buydown must meet the loan program’s rules, fit within the applicable contribution limit and make sense for the buyer. It isn’t an automatic use of leftover money.
A temporary buydown reduces payments for an initial period; it does not permanently lower the note rate.
Before reducing a seller credit, ask the lender whether an eligible buydown could help the buyer use it.
Before writing the offer
- Which limit applies to this loan, occupancy and financing structure?
- How much eligible expense is available for the credit to cover?
- Would a buydown help, and what would it actually cost?
Don’t automatically lump seller-paid buyer-agent compensation into this chart. Separate rules and exclusions can apply; confirm its treatment for the specific program.
For a buyer-friendly explanation and example, read What Are Seller Credits? How They Can Help With Closing Costs or a Rate Buydown.
Writing an offer and want to check the seller credit? Send me the purchase price, loan type, down payment and proposed contribution. We can look at how it fits before the offer goes out.
Clarity over pressure.
Considering how to structure an offer? Read Seller Credit or Price Reduction: Which Helps a Homebuyer More? for a side-by-side comparison.
Official resources
- Fannie Mae: Interested Party Contributions
- HUD: FHA Single Family Housing Policy Handbook
- USDA: Guaranteed Loan Origination FAQs
- VA: Funding Fee and Closing Costs
- VA Lenders Handbook: Chapter 8, Seller Concessions
Last reviewed: October 5, 2026. General purchase-loan reference. Product restrictions, lender requirements and guideline changes may affect a specific transaction. Jumbo and non-QM limits require a separate program check.