How much can the seller contribute on FHA?
FHA generally allows seller contributions up to 6% of the sales price toward eligible closing costs, prepaid items and discount points. Unused credit cannot be paid to the buyer as cash.
What this actually means.
The buyer still needs the required down payment. The lender must review the contract and final costs. Seller-paid items outside the allowed contribution may be treated as an inducement to purchase and can reduce the value FHA uses for the loan.
Where this can move.
Title and escrow fees, prepaid taxes and insurance, doc stamps, lender fees, seller credits, and lender credits can change the cash needed at closing.
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Educational only. FHA guidelines, lender overlays, rates, fees, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with HUD, FHA, or any government agency.