I have been asked recently what the Maximum seller contribution is on a Conforming or Conventional typical loan.
So here is the guideline:
Seller (Interested Party) contributions may be used toward prepaids and/or closing costs. The following percentages are based off the lesser of property’s sales price or appraised value.
Owner Occupied (Primary Residence) and Second Home
If a buyer is putting 10% down on the purchase of a home which will be lived in by the buyer on a full or part time basis, the maximum a seller may contribute on a conventional loan (not FHA or VA) is 3% of the purchase price of the home. So, if you are buying a home for $300,000, the most the seller could contribute to your closing costs would be $9000. If a buyer is putting 10% and less than 25% down, the seller may contribute up to 6% towards closing costs – $18,000 on a $300,000 sale. If a buyer is putting 25% or more down, the seller contribution goes up to 9% or $27,000. If the property is an investment and the buyer will not be living in it, the most a seller may contribute is 2% of the purchase price.