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Seller credit is when the seller of the property you are purchasing agrees to use some of their sale proceeds to help you, the buyer, pay for your closing cost.
Some closing cost are split between the buyer and seller, so a seller credit would be going above and beyond paying their own costs, and the shared costs.
There are limits on how much a seller can credit the buyer. These limits depend on the loan program and down payment amount - check out the PDF for specific details.
In all cases, the buyer must meet their "minimum required investment" which means, the buyer is responsible for their down payment. There are multiple sources their downpayment can come from (see down payment options) , but it cannot be a seller credit. A seller credit can cover prepaids, points, and closing cost but NOT the down payment.
In some case, asking for a seller credit instead of reducing the purchasing price, can actually help the buyer more! Depending on what we do with the seller credit we can significantly reduce your cash to close or even monthly payment!
Have questions? Let's connect!
gary h
michael s b
laura w
brian b
kenneth t
erica w
jamie t
richard u
elizabeth u