Down Payment

Can the seller pay FHA closing costs?

Short answer

Yes — up to 6% of the purchase price toward closing costs and prepaids. Seller credits cannot replace the buyer's minimum required investment.

Plain-English explanation

The 6% covers third-party fees, title, prepaids, and discount points. It does not cover the down payment. In a softer market, sellers will entertain credits in lieu of price reductions.

Practical example

On a $400,000 FHA purchase, the seller can credit up to $24,000 toward closing costs and prepaids. In a softer Florida market, asking for a 3–6% credit instead of a price reduction often closes more deals than haggling on price.

What can change the answer?

Gift source and donor eligibility, seller credit limits, down payment assistance program rules, and source-of-funds documentation can change the answer.

Your next step

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