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Seller Paid Closing Costs

“What’s the maximum a seller can pay to buyer’s closing costs?” This is a question I’m often asked and the answer – as with many mortgage questions – is “it depends.”



Allowable seller concessions can cover quite a bit. Typically they are used to pay some or all of the following charges associated with obtaining a mortgage:

– origination fees, discount points, commitment fees

– appraisal costs, flood certifications, credit reports, tax service fees

– transfer taxes, stamps, attorneys’ fees, survey charges, title insurance premiums

– funds to subsidize a temporary or permanent interest rate buydown


Also seller concessions can cover prepaid items, such as:

– interest charges

– real estate tax escrows

– hazard insurance premiums

– HOA assessments covering any period after the settlement date

– mortgage insurance premiums


The difference on how much can be paid depends on the loan type. The following are the maximum percentage of the sales price that can go to a buyer’s expenses:


Conventional (primary or secondary)

3-5% down payment: 3%

10-25% down payment: 6%

25% or more down payment: 9%

Conventional (investment): 2%


FHA: 6%


VA: 4%


USDA: no limit but individual lenders can set a limit


When structuring a contract understanding what and how much the seller can pay on the buyer’s behalf can be beneficial to you and your client. If you ever have a question on what can be paid via seller concessions, please give me a call!


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4064 Colony Road
Charlotte, NC 28211

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Wyndham Capital Mortgage

NMLS# 2948 | MLO NMLS ID #91445

Licensed in AL, CA, FL, GA, NC, SC, TX, TN & VA 

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Rebecca Richardson