In light of the recent industry changes there is going to be a lot of informaion out that is frankly confusing. In order to help with understanding how the changes impact your position as a buyer, it's helpful to review what seller concessions are allowed.
First and foremost, outside of a few specific costs, most traditional loan programs will not permit the financing of closing costs. However, they will typically allow for a seller cash contribution towards the buyer's closing costs, of which includes the buyer's agent commission.
Each loan program will have it's own rules pertaining to "interested party contributions". They are as follows.
Conventional loans:
The table below does not include agent commission in the interested party contribution
Primary or Second home | 10% down payment or less | 3% |
11% to 24.99% down payment | 6% | |
25% down payment or greater | 9% | |
Investment | All Loan to value ratios | 2% |
FHA Loans:
Will permit seller concessions up to 6% of the purchase price regardless of down payment amount. (this includes the agent commission)
VA Loans:
Will permit a max seller concession of 4% of the purchase price regardless of down payment. (this includes the agent commission)
If you have any questions on specifics, please do not hesitate to reach out.
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