Maximum Seller Paid Costs For Buyers

Maximum Seller Paid Costs By Program Type 

Buyers and Realtors, before agreeing to a sales price, know if you need or want seller paid closing costs.  In addition, one should know the following about maximum seller paid costs:

  • How much is needed for best approval?
  • What is most beneficial?
  • What are the program seller paid limits?

 FHA Maximum Seller Paid Closing Costs

6% (sometimes lower with certain investors on lower credit scores).   Even if a buyer has funds for paying costs, it could be a great strategy for the seller to pay them.  Use up to the maximum seller paid costs because financing them with such low interest rates makes financial sense.

Maximum seller paid costs on VA, FHA, USDA, FHA 203k, and Conventional loans

Maximum limits for seller paid closing costs on VA, FHA, USDA, FHA 203k, and Conventional loans

USDA Maximum Seller Paid Closing Costs

6% of the sales price.  USDA will actually allow a buyer to finance closing costs.  Closing costs may be financed if the property appraises for more than the price.  This is unique to USDA.

VA Maximum Seller Paid Closing Costs

Maximum seller paid “concessions” for a buyer is 4% of the sales price.  Sales concessions allow the seller to pay the buyer’s pre-paids (such as escrows and first year of insurances) or paying off buyer’s debts.  On top of that, VA allows for ALL “customary closing costs” to be paid by the buyer.  So between the two, usually they will cover all costs at closing as long as a sufficient amount is listed in the contract.

Conventional (Fannie Mae & Freddie Mac) Maximum Seller Paid Closing Costs

Seller paid closing cost limits depend on the down payment percentage and residency type.  Below are the varying percentages.

  • Primary: 3% over 90%, 6% from 75.01% – 90%, 9% when 75% or less
  • Secondary: 6% from 75.01% – 90%, 9% when 75% or less
  • Investment: 2% for any LTV

FHA 203k Maximum Seller Paid Closing Costs

6% of the sales prices.  So keep in mind, this percentage is only based on the price.  Therefore, the calculation does not use the amount of the renovations.

Reverse Mortgages Seller Paid Cost Rules

The seller can only pay costs that are customarily the seller’s at closing.  The buyer must pay all buyer closing costs which even includes a home warranty.

Most Important Point to Remember With Seller Paid Closing Costs

If you only remember one thing in this article, just always talk with us before finalizing a contract!  Better to have the amount for the seller paids right up-front than be short funds to close.

Contact our team up-front to best strategize on how much seller paid costs to include in the purchase price.

Team Move lends in areas such as Wilmington, Leland, Hampstead, Jacksonville, Camp Lejeune, Whiteville, Shallotte, Southport, Elizabethtown, Lumberton, Fort Bragg, Pope Air Force Base, Fayetteville, Rockingham, Raleigh, Garner, Smithfield, Clayton, Goldsboro, Charlotte, Greensboro, Winston-Salem, Durham, Chapel Hill, Burgaw, Castle Hayne, Holden Beach, Supply, Ocean Isle Beach, Sunset Beach, Hubert, Tabor City, Carolina Beach, Kure Beach, Laurinburg, Topsail Beach, North Topsail Beach, Surf City, Sneads Ferry, Richlands, Wrightsville Beach, New Bern, Oak Island, Saint James, Wallace, Sanford, Pittsboro, Apex, Cary, Raleigh, Holly Springs, Fuquay Varina, Siler City, Southern Pines, Aberdeen, Pinehurst, Whispering Pines, Vass, Spring Lake, Fayetteville, Lillington, Hope Mills, Dunn, Angier, Smithfield, as well as the rest of NC.  North Myrtle Beach, Myrtle Beach, Conway, Loris, Little River, Longs, as well as the rest of South Carolina and Virginia.

Author: Russell Smith

Team Move OVM Financial loan officer success is Russell’s primary focus. He provides the tools and techniques he used as a top producing loan officer. Additionally he offers the Team Move OVM Financial Agent Training Program. Sharing is so important to Russell so he works diligently to be a resource to loan originators and Realtors.