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Seller Concession Calculator
Different loan types cap seller concessions at different percentages. This calculator shows the cap for your loan type and how much of your requested concession actually fits.
Allowed concession
$9,000
cash credited at closing
Cap by loan type
3%
Conventional primary residence, <10% down
Max concession dollars
$13,500
Excess over limit
$0
within limits
How concessions work
A seller concession is money the seller credits the buyer at closing for closing costs, prepaids, or rate buydown points. It's capped by loan type to prevent backdoor price inflation. Anything above the cap must be restructured (usually as price reduction).
Concessions are most powerful when used for a permanent or temporary rate buydown — a $9,000 concession used to buy 1.5 points reduces the rate by ~0.375% and saves more over the life of the loan than the same dollars applied to closing costs alone.
How to Use
- Enter the purchase price and your down payment.
- Pick the loan type — caps differ widely (FHA 6%, VA 4%, USDA 6%, conventional 3–9% based on down payment).
- Enter the dollar concession you're negotiating with the seller.
- Read the allowed amount and any excess that won't credit at closing.
- Consider routing the concession into a permanent or temporary rate buydown for the most leverage.
Frequently Asked Questions
What can a seller concession be used for?
Closing costs (lender fees, title, transfer taxes), prepaids (escrow setup, prepaid interest, first-year insurance), and discount points or rate buydowns. They cannot be used to fund the down payment.
Why are concessions capped?
To prevent inflated prices: a $400k home selling for $415k with $15k 'concession' is a backdoor way of financing closing costs into the mortgage. Caps keep the appraised value honest.
What's the cap for FHA loans?
6% of purchase price, regardless of down payment. This is one of FHA's borrower-friendly features — high concession allowance plus low down payment makes FHA popular with first-time buyers.
How do conventional concessions vary by down payment?
Primary residence with <10% down: 3% cap. With 10–25% down: 6% cap. With 25%+ down: 9% cap. Investment properties cap at 2% regardless of down payment.
Related Calculators
Closing Cost Calculator
Estimate closing costs the concession can offset.
Mortgage Points Calculator
Apply concession dollars to discount points for max leverage.
Temporary Buydown Calculator
Use seller concession to fund a 2-1 or 3-2-1 buydown.
Mortgage Buydown Savings Calculator
See savings from a permanent rate buydown.
Seller-Paid Closing Cost Calculator
Build a closing cost picture with seller-paid items.
Closing Disclosure Calculator
Walk through every closing disclosure line including credits.
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