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How Much Can A Seller Contribute to A Buyer's Transaction Costs?

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) Contribution

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
> 90% CLTV = 3%
>75% & < 90% CLTV = 6%
<75% CLTV = 9%


Investment: 2%

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.

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