# Seller concessions

> Seller concessions are costs the seller pays for the buyer, usually closing costs. How much Fannie Mae and VA loans allow and what they can’t cover.

URL: https://mail.mortgage-math-us.com/glossary/seller-concessions/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**Seller concessions** are costs the seller agrees to pay on the buyer’s behalf, most often closing costs and prepaid items, usually written into the contract as a seller credit. Each loan program caps them: on a Fannie Mae loan, from 3% to 9% of the price (or appraised value, if lower) for a home you’ll live in, depending on your down payment.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Fannie Mae, less than 10% down (LTV/CLTV above 90%) | 3% | [Fannie Mae Selling Guide B3-4.1-02](https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs) | May 7, 2025 |
| Fannie Mae, LTV/CLTV 75.01–90% | 6% | [Fannie Mae Selling Guide B3-4.1-02](https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs) | May 7, 2025 |
| Fannie Mae, 25% or more down | 9% | [Fannie Mae Selling Guide B3-4.1-02](https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs) | May 7, 2025 |
| VA limit (normal closing costs not counted) | 4% | [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) | Oct 28, 2026 |

## Limits and an example

Fannie Mae calls these interested party contributions. Its caps are 3% above 90% LTV, 6% from 75.01% to 90%, 9% at 75% or less, and 2% on an investment property. VA loans cap concessions at 4% of the home’s reasonable value, but the seller paying your normal closing costs doesn’t count toward that limit. FHA and USDA set their own caps.

On a $360,000 home with 10% down, a Fannie Mae loan allows up to $21,600; with 5% down the cap falls to $10,800.

## What concessions can’t cover

Under Fannie Mae’s rules, a seller credit can’t pay your down payment or count toward [reserves](https://mail.mortgage-math-us.com/glossary/reserves/), and it can’t exceed your actual closing costs. Anything above the cap or your costs is treated as a price reduction, which lowers the value used for [loan-to-value](https://mail.mortgage-math-us.com/glossary/loan-to-value-ratio/). Check that the seller credit on page 3 of the Closing Disclosure matches what you negotiated. For other ways to cut the bill, see [how to lower closing costs](https://mail.mortgage-math-us.com/blog/how-to-lower-closing-costs/).

## Related terms

- [Closing costs](https://mail.mortgage-math-us.com/glossary/closing-costs/) and [lender credit](https://mail.mortgage-math-us.com/glossary/lender-credit/); estimate yours with the [closing cost calculator](https://mail.mortgage-math-us.com/tools/closing-cost-calculator/)

## Sources

- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [Fannie Mae Selling Guide B3-4.1-02](https://selling-guide.fanniemae.com/sel/b3-4.1-02/interested-party-contributions-ipcs) — Fannie Mae: most an interested party may pay toward closing costs, principal residence or second home, LTV/CLTV 75.01–90%; Fannie Mae: most an interested party may pay toward closing costs, principal residence or second home, LTV/CLTV above 90%; Fannie Mae: most an interested party may pay toward closing costs, principal residence or second home, LTV/CLTV 75% or less (May 7, 2025)
- [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) — VA limit on seller concessions (share of the home’s reasonable value) (Oct 28, 2026)
- [CFPB: Closing Disclosure explainer (seller credits)](https://www.consumerfinance.gov/owning-a-home/closing-disclosure/)

_General information, not financial advice._