{"id":2709,"date":"2026-03-24T14:55:18","date_gmt":"2026-03-24T14:55:18","guid":{"rendered":"https:\/\/lrgrealty.com\/seller-concessions-2026-guide\/"},"modified":"2026-10-15T09:05:20","modified_gmt":"2026-10-15T14:05:20","slug":"seller-concessions-2026-guide","status":"publish","type":"post","link":"https:\/\/lrgrealty.com\/lrg-blog\/seller-concessions-2026-guide\/","title":{"rendered":"Seller Concessions in 2026: When to Ask, Offer, or Accept Them"},"content":{"rendered":"
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On a conventional loan, the maximum seller concession is 3% with less than 10% down, 6% with 10% to under 25% down, and 9% with 25% or more down for a primary residence or second home. Investment properties are capped at 2% at all down payment levels.<\/p>\n

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Conventional Loan Limits<\/h3>\n
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  • Less than 10% down:<\/strong> Maximum seller concession is 3% of the lesser of the sale price or appraised value, per the Freddie Mac Seller\/Servicer Guide effective July 1, 2026.<\/li>\n
  • 10% to under 25% down:<\/strong> Maximum seller concession is 6%.<\/li>\n
  • 25% or more down:<\/strong> Maximum seller concession is 9%.<\/li>\n
  • Investment property:<\/strong> Maximum seller concession is 2% at all down payment levels.<\/li>\n<\/ul>\n<\/article>\n
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    FHA and VA Limits<\/h3>\n
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    • FHA:<\/strong> Interested parties may contribute up to 6% of the sale price toward closing costs, prepaids, and discount points, per HUD Handbook 4000.1.<\/li>\n
    • VA:<\/strong> Seller concessions are limited to 4% of the home’s reasonable value as determined by the VA Notice of Value. The seller can pay certain closing costs such as origination fees, discount points, and appraisal fees separately from the 4% cap.<\/li>\n<\/ul>\n<\/article>\n
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      What Seller Concessions Cover<\/h3>\n
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      • Eligible costs:<\/strong> Closing costs, prepaid items like insurance and tax escrow, discount points to buy down your interest rate, and the FHA upfront mortgage insurance premium.<\/li>\n
      • Not eligible on conventional:<\/strong> Down payment, minimum borrower contribution, or financial reserves. On FHA, contributions may not be used for the borrower’s minimum required investment.<\/li>\n
      • If the credit exceeds your costs:<\/strong> On a conventional loan, the excess is treated as a sales concession and may require a reduction to the sale price for underwriting.<\/li>\n<\/ul>\n<\/article>\n
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        Rates Right Now<\/h3>\n
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        • 30-year fixed:<\/strong> 7.28% as of the week of October 1, 2026, per the Freddie Mac Primary Mortgage Market Survey. Up from 6.34% a year ago.<\/li>\n
        • 15-year fixed:<\/strong> 6.60% for the same week.<\/li>\n
        • Why this matters for concessions:<\/strong> At current rates, a seller-funded rate buydown using discount points can reduce your monthly payment. The rate reduction per point varies by lender and market, per the CFPB.<\/li>\n<\/ul>\n<\/article>\n<\/div>\n
          Asked First<\/span>Key questions before you dig in<\/div>\n
          \nCan seller concessions be used for a down payment?<\/summary>\n

          No. On conventional loans, financing concessions may only be used to pay borrower closing costs and up to 12 months of HOA dues, per the Freddie Mac Seller\/Servicer Guide. On FHA loans, contributions may not be used for the borrower’s minimum required investment, per HUD Handbook 4000.1.<\/p>\n<\/details>\n

          \nWhat is the max seller concession on a conventional loan with 5% down?<\/summary>\n

          With 5% down on a conventional loan, your LTV is above 90%, so the maximum seller concession is 3% of the lesser of the sale price or appraised value. On a $300,000 home, that means the seller can contribute up to $9,000 toward your closing costs.<\/p>\n<\/details>\n

          \nWhat is the max seller concession for FHA loans in 2026?<\/summary>\n

          FHA caps interested party contributions at 6% of the sale price. On a $325,000 home, that is up to $19,500 toward origination fees, closing costs, prepaids, discount points, and the upfront mortgage insurance premium. Contributions exceeding 6% or exceeding your actual costs are treated as inducements to purchase and trigger a dollar-for-dollar reduction to the sale price for underwriting, per HUD Handbook 4000.1.<\/p>\n<\/details>\n

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