Seller Concession Limits by Loan Type (2026)
How much a seller (or builder or agent) can pay toward your costs on conventional, FHA, VA and USDA loans, from the official guides.
Every item cites an official source (Fannie Mae, Freddie Mac, HUD, VA or USDA) and the date we checked it. Last checked Nov 8, 2026.
Official, in effect Quick comparison
| Loan type | Max seller / interested-party contribution | Measured against |
|---|---|---|
| Conventional, home or 2nd home | 3% (LTV over 90%) · 6% (75.01–90%) · 9% (75% or less) | Lower of price or appraised value |
| Conventional, investment | 2% | Lower of price or appraised value |
| FHA | 6% | Sales price |
| VA | 4% in "concessions" (normal closing costs and discount points don't count) | VA's reasonable value |
| USDA guaranteed | 6% | Sales price |
Sources: Fannie Mae B3-4.1-02 · Freddie Mac Guide 5501.5 · HUD Handbook 4000.1 · VA lender training: fees and charges · 7 CFR 3555.102 · Checked Nov 8, 2026
Official, in effect Conventional (Fannie Mae and Freddie Mac)
Fannie Mae calls these interested party contributions (IPCs). They're limited by LTV for a principal residence or second home: 3% if LTV/CLTV is over 90%, 6% from 75.01% to 90%, and 9% at 75% or less. For an investment property the limit is 2%. The percentage is based on the lower of the sales price or appraised value, not the loan amount.
Typical seller-paid costs set by local custom don't count toward the limit. Anything over the limit, or over your actual closing costs, is treated as a sales concession and reduces the price used for the loan. IPCs can't be used for your down payment, reserves or minimum contribution. Freddie Mac's Guide Section 5501.5 uses the same 3% / 6% / 9% tiers and 2% for investment properties.
Sources: Fannie Mae Selling Guide B3-4.1-02 (05/07/2025) · Freddie Mac Guide Section 5501.5 · Checked Nov 8, 2026
Official, in effect FHA
HUD's Handbook 4000.1 lets interested parties (seller, agents, builder, lender and others) pay up to 6% of the sales price toward your origination fees, other closing costs, prepaid items and discount points. The 6% includes interest-rate buydowns and payment of the upfront mortgage insurance premium. Anything over 6%, or over your actual costs, is treated as an inducement to purchase. Interested-party money can't cover your required 3.5% minimum investment.
Sources: HUD Handbook 4000.1 (Update 18, Aug 12, 2026) · HUD: Handbook 4000.1 information page · Checked Nov 8, 2026
Official, in effect VA
VA treats seller concessions over 4% of the property's established reasonable value as excessive. Concessions include paying your VA funding fee, prepaying your taxes and insurance, gifts, rate buydowns and paying off your debts. The seller paying your normal closing costs and reasonable discount points doesn't count toward the 4%.
Sources: VA lender training: Borrower fees and charges · VA: Loan fees · Checked Nov 8, 2026
Official, in effect USDA guaranteed
USDA's rules bar a purchase where the seller or another interested party contributes more than 6% of the sales price toward your financing costs, closing costs, escrow or giveaways, unless the Agency allows otherwise. USDA's 2024 handbook update says seller money for the buyer's real estate commission doesn't count toward that limit.
Sources: 7 CFR 3555.102(h) · USDA RD: Handbook update highlights (July 2024) · Checked Nov 8, 2026
Lender overlays can be stricter
These are the program maximums. Your lender may set lower limits. And the seller still has to agree. Get any credit written into the purchase contract.
Ask your loan officer for their limit · Checked Nov 8, 2026
Related tools and pages
Gift funds for a down payment · VA vs conventional (2026) · FHA vs conventional (2026) · USDA rural loans · VA funding fee · Cash flow calculator
General information only. Not legal, tax or financial advice. RentToolkit is not a lender, law firm or financial adviser. Mortgage rules change often and lenders can add stricter rules of their own ("overlays"), so confirm with the official source and a licensed loan officer before you act.