The Seller Can Help With Closing Costs.
Seller concessions, also called interested party contributions, can cover closing costs within program limits.
Quick answer
Saxton Mortgage does. At least one FHA program we offer allows financing concessions of up to 6% of the sales price. At least one VA program we offer caps sales concessions at 4% of the property’s reasonable value, and that cap does not include normal discount points or the seller paying your closing costs. On at least one conventional program, the limit for an investment property is 2% of value.
Money toward closing, not toward your deposit
Concessions offset closing costs, and the ceiling depends on the program.
- Seller concessions are contributions from an interested party toward your closing costs.
- One program allows up to 6% toward closing across all occupancy types.
- Limits vary by program and by whether the home is a primary residence, second home or investment.
- Concessions are negotiated in the purchase contract, not added afterward.
- They offset closing costs rather than reducing what you contribute at closing.
- Amounts above the applicable ceiling are not permitted and must be restructured.
Interested party contributions
Up to 6% on one program
Ceiling varies by program
Varies by occupancy type
Negotiated in the contract
Applied to closing costs
What are Saxton seller-paid closing costs?
A seller contribution toward the costs of closing, within defined limits.
Closing costs are the expense buyers most often underestimate. Title work, appraisal, prepaid taxes and insurance, lender fees. They arrive together at the end, and they arrive in cash. One of the most useful things a buyer can negotiate is having the seller cover some of them.
In the guidelines this is called a seller concession, or an interested party contribution. It is a contribution from someone with an interest in the transaction toward your closing costs. One of our programs permits up to 6% toward closing across all occupancy types, and the ceiling on other programs varies.
Two things are worth knowing before you negotiate. The limit depends on the program and on whether the property is a primary residence, a second home or an investment. And concessions are applied to closing costs rather than to your own contribution at closing, so they change how much cash you need on the day without changing the structure of the loan itself.
Why ask Saxton about seller concessions?
For buyers writing an offer who want to know what they can actually ask for.
Know The Ceiling First
The limit varies by program and occupancy. Knowing your number before you write the offer is more useful than finding out after it is accepted.
Real Cash At Closing
Concessions reduce what you bring on closing day, which is often the binding constraint rather than qualifying itself.
Negotiated, Not Added Later
This is part of the purchase contract. It is difficult to bolt on afterward, so it belongs in the conversation with your agent early.
Occupancy Changes It
A primary residence, a second home and an investment property are not treated the same. We will tell you which applies to you.
We Will Check Your Program
Different products carry different ceilings. Rather than quote a general figure, we will confirm the one that applies to your file.
Above The Ceiling Fails
Anything beyond the applicable limit is not permitted and the transaction has to be restructured, so knowing your number first matters.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about having the seller cover closing costs.
Saxton Mortgage does. At least one FHA program we offer allows financing concessions of up to 6% of the sales price. At least one VA program we offer caps sales concessions at 4% of the property’s reasonable value, and that cap does not include normal discount points or the seller paying your closing costs. On at least one conventional program, the limit for an investment property is 2% of value.
Yes, within limits. Guidelines call this a seller concession or interested party contribution, and it is a normal part of many purchase contracts.
It depends on the program and the occupancy. One of our programs permits up to 6% toward closing for all occupancies, and other products set their own ceilings.
No. Concessions are applied to closing costs. They change how much cash you need on closing day rather than the structure of the loan.
Yes. Limits differ between a primary residence, a second home and an investment property.
During the offer. It forms part of the purchase contract, so it is much easier to include from the start than to add later.
Anything above the applicable ceiling is not permitted and the transaction has to be restructured. This is a good reason to know your number before negotiating.
No. They are applied toward closing costs. What you contribute yourself is looked at separately.
Yes. How much a seller can contribute to closing costs depends on the program and on how you will occupy the home. One of our programs permits up to 6% toward closing across all occupancies, and the ceiling on other programs varies, which is why the number to work from is the one for your specific file. Ask before you write the offer, because a seller contribution above the ceiling does not simply get trimmed, it can break the file.
Yes, those are three names for one thing. Seller credit, seller concession and interested party contribution, sometimes shortened to IPC, all describe money the seller or another interested party puts toward your closing costs. What none of them can do is cover your down payment, which is looked at separately.
Find out what you qualify for
Before you write an offer, it is worth knowing exactly what the seller is allowed to contribute. Ask us and we will confirm your ceiling.
Get Pre-Qualified*Seller and interested party contribution limits are set by the applicable program and vary by occupancy type and transaction. Contributions are applied toward closing costs and are subject to program guidelines, credit approval and verification. Amounts exceeding applicable limits are not permitted. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.