Seller Concessions are also known as ‘3rd Party Contributions’. Who is a typical interested party in a purchase transaction? Sellers, Buyer Agents and Listing Agents are 3rd party contributions.

3rd party contributions are allowed on purchase transactions but can only be applied toward closing costs and prepaids. 3rd party contributions cannot be applied toward Down Payment

Contribution limits apply to any and all 3rd party contributors as an aggregate limit. So, if seller and buyer agent are giving a contribution, the total of their contributions cannot be more than the MAX limits.

We discuss the importance of not having too much 3rd party contributions because of running the risk of leaving money on the table. It is not easy for a lender to estimate exactly what total costs will be because of title aggregate adjustments and seller prorations for taxes, interest, and insurance. We like to be conservative in our number

• FHA loans have is 6% contribution limit no matter what down payment amount

• VA loans have is 4% contribution limit no matter what down payment amount

• Conventional loans on primary and 2nd homes with 10% down or less – MAX is 3% contribution

• Conventional loans on primary and 2nd homes with 10%-25% down – MAX is 6% contribution

• Conventional loans on investment properties on any loan – MAX is 2% contribution

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

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Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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