Seller Credits · Rate Buydowns
Seller concessions & rate buydowns, at a glance
How a seller credit may lower your cash to close or your payment.
In today’s market, many Florida sellers may be open to helping with costs. A seller credit can cover closing costs, prepaids or a rate buydown. Here’s how much each loan type allows.
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- NMLS #2664300
- Smart Home Loans NMLS #1734077
Maximum seller contributions by loan type
| Loan type | Down payment | Max seller contribution |
|---|---|---|
| Conventional (primary home or second home) | Smaller down payment | 3% of price |
| Conventional (primary home or second home) | Mid-range down payment | 6% of price |
| Conventional (primary home or second home) | Larger down payment | 9% of price |
| Conventional investment property | All | 2% of price |
| FHA* | Low-down-payment program (minimum depends on credit score) | 6% of price |
| VA | Any | 4% concessions, plus normal closing costs on top |
| USDA | Any | 6% of price |
Caps depend on the loan program, occupancy and down payment, and lender rules may be stricter. Not a commitment to lend.
*FHA allows a low down payment, and the minimum may depend on your credit score. Seller-paid rate buydowns and points count toward these caps. Limits are percentages of the lower of price or appraised value, and the credit can’t be more than your actual closing costs and prepaids. Lender overlays may apply.
Ways a seller credit may be used
Concessions can’t exceed your actual costs, and they never go to you as cash back.
Closing costs & prepaids
Lender and title fees, taxes, insurance escrows and other eligible costs.
Temporary buydown
A seller-funded buydown, such as a 2-1 buydown, may lower your payment for the first years of the loan. You still qualify at the full payment.
Permanent buydown (points)
Points paid at closing may lower your rate for the life of the loan.
For realtors
A seller credit may help a deal close when buyers are tight on cash. I can run scenarios for your listings and buyers.
Programs, guidelines and eligibility change and vary by lender and program. This page is general information, not a commitment to lend or a guarantee of approval. All loans are subject to credit approval, underwriting and property approval. Not legal or tax advice.
Questions people ask me
Straight answers. Programs and guidelines change, and everything depends on the lender, the program and your situation.
How much can a seller contribute on a conventional loan?
On a primary or second home, the cap is 3%, 6% or 9% of the price depending on your down payment, with higher caps as the down payment grows. On an investment property, 2% regardless of down payment.
How much can a seller pay on an FHA loan?
Up to 6% of the sales price. FHA allows a low down payment, and the minimum may depend on your credit score.
How much can a seller contribute on a VA loan?
Up to 4% in seller concessions, plus normal closing costs on top of that.
How much can a seller contribute on a USDA loan?
Up to 6% of the sales price.
Do buydowns count toward the seller concession cap?
Yes. Seller-paid rate buydowns and discount points count toward the cap.
Can I get cash back from a seller credit?
No. Seller credits can only cover eligible closing costs, prepaids and buydowns, and can’t exceed what those actually cost.
Let’s talk it through
No pressure, just clear answers about what may fit you. Call, text or email me.
Ready to apply? Start at smarthomeloans.net.