Seller Concessions in 2026: How Much You Can Ask For by Loan Type

In 2026's buyer-leaning market, seller concessions are back in play, and how much you can ask for depends on the loan you are bringing. On a conventional mortgage the cap is 3%, 6%, or 9% of the price, set by your down payment. FHA allows up to 6% of the sales price at any down payment, VA caps what it defines as concessions at 4% and handles ordinary closing costs separately, and USDA allows 6% with its own carve-outs.

Each cap comes from the loan program's own rulebook, and each sits on top of a second limit almost nobody mentions: a concession can never exceed your actual, itemized costs. Here is every cap with the source attached, then the arithmetic of a real ask on a $400,000 house.

The limits at a glance

Here is the whole answer in one table; the sections below add the fine print that decides what you can actually collect. The percentages apply to the purchase price (on conventional loans, technically the lower of the sales price or the appraised value).

Two caveats bind more often than the caps themselves: a concession can only pay real, documented costs (never cash back to you), and on conventional loans any excess reduces the price your loan is calculated from. Both are covered below.

What counts as a seller concession

A seller concession is money the seller, builder, or another party with a stake in the deal contributes toward costs that would otherwise be yours: lender fees, title and settlement charges, prepaid taxes and insurance, discount points, rate buydowns. The industry's baseline definition is Fannie Mae's interested party contribution, or IPC: contributions from third parties with a vested interest in the transaction, used to cover costs that are typically the buyer's responsibility.

What a concession can never do, on any loan type, is fund your down payment. Fannie Mae is explicit that IPCs cannot be used to make the down payment, meet reserve requirements, or meet the minimum borrower contribution. A concession shrinks the closing-cost side of your ledger; the equity still has to be your own money. (This is the same ledger we build in cash to close vs. down payment: a concession shrinks the wire, not the equity line.)

One point that surprises people: fees state law or local custom already assigns to the seller (transfer taxes in some states, real estate commissions, an owner's title policy where customary) do not count against these caps. The caps govern the seller paying your costs, not their own.

Conventional loans: the cap moves with your down payment

Put down less than 10% and the seller can contribute at most 3% of the price. From 10% to 24.99% down the cap is 6%, and at 25% or more it is 9%, per Fannie Mae Selling Guide B3-4.1-02 (updated May 2025). Investment properties get a flat 2% at any down payment.

The logic is risk: the less equity you bring, the less the transaction is allowed to lean on seller money. Two conventional-specific rules are worth knowing before you write the ask into an offer. If the concession exceeds your actual closing costs, the excess is reclassified as a sales concession and deducted from the sales price before your loan-to-value ratio is recalculated, which can change your loan terms. And seller-funded rate buydowns count inside the cap, not on top of it: if the seller pays for a temporary 2-1 buydown or permanent points, that spending competes with your closing costs for the same 3%, 6%, or 9%.

FHA loans: a flat 6% of the sales price

FHA allows interested parties to contribute up to 6% of the sales price, at any down payment. HUD's definition, set in its Single Family Housing Policy Handbook 4000.1 and restated in a 2023 Federal Register notice, covers origination fees, other closing costs, prepaid items, discount points, permanent and temporary interest rate buydowns, and payment of the upfront mortgage insurance premium. Seller-paid real estate commissions and the payoff of a PACE lien sit outside the definition.

Cross the 6% line and the consequence is concrete: the excess is deducted, dollar for dollar, from the sales price before your maximum loan amount is calculated. One asymmetry worth noticing: the seller's allowed 6% can exceed FHA's entire 3.5% minimum down payment. The actual-costs ceiling below keeps that theoretical number in check.

VA loans: 4%, but the definition is the whole game

VA's official Home Loan Guaranty Buyer's Guide states the rule plainly: sellers can pay closing costs and discount points, and concessions can run up to 4%. What makes VA different is what counts. VA draws its 4% line around a narrower category of concessions and treats a seller's payment of the buyer's ordinary loan closing costs as a separate, permitted item; the precise classification lives in Chapter 8 of VA's Lenders Handbook, and your lender runs it. The practical move: itemize what you want the seller to pay, then ask the lender which bucket each line lands in before the offer goes out.

VA also regulates what you can be charged at all: under 38 CFR 36.4313, origination charges outside a defined list of reasonable and customary items are capped at a flat 1% of the loan. A VA ask plays on a smaller board: less to pay overall, with room for the seller to cover what remains.

USDA loans: 6%, with its own carve-outs

USDA's guaranteed loan program limits seller and other interested party contributions to 6% of the sales price, per HB-1-3555, Chapter 6 (revised May 2025). The handbook adds carve-outs the other programs do not: lender credits funded through premium pricing, seller-funded repairs (which must be held in escrow), and seller payment of the buyer's real estate commission fees are not counted inside the 6%.

The same handbook draws hard lines on what concessions can never buy: your personal debts, and throw-ins like furniture, cars, or electronics. Household appliances that normally convey with a home are fine.

The ceiling nobody mentions: your actual closing costs

On most purchases, the binding limit is not the loan-type percentage; it is your itemized bill. Concessions can only cover real costs, so your practical maximum is whichever is smaller: the program cap, or your actual closing costs plus prepaids and escrow funding.

At a $400,000 price, the caps are $12,000 (3%), $16,000 (4%), $24,000 (6%), and $36,000 (9%). A typical closing-cost bill at that price, with prepaids and escrow included, lands near $12,000 to $13,000. So for a buyer putting 10% down (a $24,000 cap), FHA (also $24,000), or USDA, the percentage is not the constraint at all; the bill is. The percentage cap only starts clipping real asks below 10% down on conventional, where 3% meets a bill slightly bigger than 3%.

That leads to the practical rule for writing the offer: do not ask for a round number. Ask for the bill.

The worked example: asking on a $400,000 house with 5% down

Here is the full arithmetic for the tightest common case: $400,000 price, conventional loan, 5% down, 30-year fixed at 6.55%, the national average for the week of July 16, 2026, per Freddie Mac's Primary Mortgage Market Survey. Assume $4,000 in earnest money and a closing on the 18th of a 30-day month. Fee figures are illustrative; yours will vary by lender, state, and county.

Step 1: the loan and the cap.

• Down payment: $400,000 × 5% = $20,000, so the loan is $380,000 and the loan-to-value ratio is 95%
• Above 90% LTV, the conventional concession cap is 3%: $400,000 × 3% = $12,000

Step 2: the actual bill.

Step 3: the usable concession. The cap is $12,000 and the bill is $12,386, so the maximum usable concession is the smaller number: $12,000. The remaining $386 stays on your side of the ledger.

Step 4: what it does to the wire.

• Without a concession: $20,000 down + $12,386 costs − $4,000 earnest money = $28,386 cash to close
• With the full $12,000 concession: $28,386 − $12,000 = $16,386

The concession cut the closing-day wire by about 42% without touching the down payment. Now rerun the same numbers at 10% down: the cap doubles to $24,000 on paper, but the bill (about $12,340, slightly lower because prepaid interest falls with the smaller loan) becomes the ceiling. Asking for more than the bill accomplishes nothing on any loan type, and on a conventional loan it can shrink the price your loan is computed from.

For the fuller picture of what the cash stack looks like at this price point, down payment by down payment, see how much cash you really need to buy a $400,000 house.

A concession is not free money

A seller weighs your offer by their net, so a $12,000 concession reads like a $12,000 price cut to them, and sellers price accordingly. The CFPB puts it bluntly: the seller will usually require a higher price to cover the cost of the credit. A concession converts cash you need today into a slightly larger loan you carry for thirty years.

That can be exactly the right trade. If the wire is your binding constraint and the monthly payment has room, a concession is the lever that gets you to the closing table with your reserves intact. If cash is comfortable and the monthly payment is tight, a price cut serves you better. We run that full comparison, break-even arithmetic included, in concessions or a price cut: the math that decides. The honest way to decide is to run both versions side by side: build both offers in the Offer Buildr calculator and compare the cash-to-close line and the monthly line of each before you pick the ask.

Whichever way you go, write the ask as an itemized number backed by your lender's fee worksheet, keep it inside the cap for your loan and down payment, and remember that the seller's agent is reading your total offer, not just your price.

Estimates, not appraisals · not legal or financial advice.