VA Maximum seller paid "concessions" for a buyer is 4% of the sales price which will allow for paying pre-paids (such as escrows and first year of insurances), paying off buyer’s debts, and paying part or all of the VA funding fee.
Summary: This article explains the 2015 limits for FHA seller concessions or contributions toward a buyer’s closing costs.It was updated and fact-checked at the time of publication, using HUD Handbook 4155.1, Chapter 2, Section A. FHA loans are one of the most popular financing programs among home buyers today.
Fha Or Conventional Loan Another benefit of going with a conventional loan vs. an FHA loan is the higher loan limit, which can be as high as $726,525 in certain parts of the nation. This can be a real lifesaver for those living in high-cost regions of the country (or even expensive areas in a given metro).
Contribution limits apply to any and all 3rd party contributors as an aggregate limit. So, if seller and buyer agent are giving a contribution, the total of their contributions cannot be more than the MAX limits. We discuss the importance of not having too much 3rd party contributions because of running the risk of leaving money on the table.
FHA / HUD Guidelines for Maximum Seller Concessions: Less than 10% down payment = Maximum 3% seller concessions. 10 – 25% down payment = Maximum 6% Seller Concessions. 25%+ down payment = Maximum 9% Seller Concessions. Click here for more info on FHA Loans.
There is no income limit if the Mortgaged Premises is located in a low-income census tract. To determine whether the Borrower’s income exceeds the income limits, the Seller must rely on the income used to qualify the Borrower and submitted to Loan Product Advisor for loan product advisor mortgages. See Guide Section 4501.7. (Continues)
Payoff of a PACE loan by a seller is not subject to Fannie Mae IPC limits because it is not a financing concession. Financing concessions that exceed the limits listed below are considered sales concessions and are subject to Fannie Mae IPC limits.
Seller concessions may exceed the FHA’s 6 percent limit, but result in a dollar- for-dollar reduction to the loan amount. Also, the 6 percent max applies to the lower of the home’s appraised value or the sale price.
That value cap on seller concessions requires the seller to keep track of the value of the concessions offered, but there are some things the buyer can do for the seller that don’t count as a concession unless they exceed certain limits. For example, under VA rules, paying the buyer’s loan-related closing costs is not considered a concession.
Seller contributions (or other interested parties) are limited to six percent of the loan amount and must represent an eligible loan purpose in accordance with this paragraph. closings costs and/or prepaid items paid by the