Seller/Realtor Concessions Cheat Sheet

by | Feb 1, 2023 | Cheatsheet

Here is a great reference guide to help realtors and loan officers on the concession guidelines. Concession are contributions from interest parties on the loan who can influence the terms of the sale (realtor, seller, builder). They are referred to as IPCs or Interest Party Contributions in the conforming guidelines. An employer is not considered an interested party.

The concession can only apply toward the closing costs so it cannot eat into the borrower required down payment. If the credit exceeds all costs, the credit must be scaled back at closing.

Loan Type Maximum Allowed
Conventional Primary or 2nd home     over 90% LTV  3%
 Conventional Primary or 2nd home    over 75% LTV  6%
 Conventional Primary or 2nd home    under 75% LTV  9%
Conventional Non-Owner  2%
FHA  6%
VA  no minimum**
 USDA  6%

** Although there is no cap on the amount a seller can provide for closing costs, VA loans will allow the a seller credit to pay for tradeline payoffs but this is capped at 4%

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