How do seller credits limits work depending on down payment and loan type?

How much can sellers contribute to my closing costs?

You want to understand how much sellers can contribute toward your closing costs based on your down payment size and loan type. Seller credits help cover expenses like appraisal fees, title insurance, and loan origination charges, but lenders cap how much sellers can contribute.

Conventional loans allow seller credits up to 3% of the home's purchase price when you put down less than 10%, 6% with a 10-24% down payment, and 9% with 25% or more down. FHA loans permit up to 6% in seller credits regardless of down payment amount. VA and USDA loans typically allow up to 4% in seller contributions. Investment property purchases face stricter limits—usually 2% maximum regardless of down payment size.

Check your Loan Estimate to see the seller credit amount listed in Section N. Compare this figure against the maximum allowed for your loan type and down payment percentage. Your lender calculates the limit based on the purchase price, not the loan amount.

Share your loan type and down payment amount with your lender, and they can walk you through the exact seller credit limits for your situation. Many buyers negotiate seller credits during the purchase agreement to help with closing costs.