Updated November 2026. We turned our old FSBO negotiation guide into a plain look at FHA seller concessions, for owners who get an offer from an FHA buyer. HUD, VA and Fannie Mae rules read November 1, 2026.
FHA seller concessions are capped at 6% of the sales price. HUD set that limit in Mortgagee Letter 2006-04 (January 27, 2006), and anything above it comes off the buyer’s loan, dollar for dollar. On a $300,000 sale, that’s up to $18,000, which the seller can put toward the buyer’s closing costs, prepaid items and discount points.
Selling by owner and got an FHA offer? List with a flat fee MLS package, from $99 in most states (see your state page), and you answer every offer yourself.
Jump to: 📝 What a concession is · 💲 The FHA 6% limit · 📊 FHA vs VA vs conventional · 🤝 Answering the ask · 🏠 Low appraisal · ❓ FAQ
Key takeaways
- FHA lets the seller and other interested parties pay up to 6% of the sales price toward the buyer’s costs.
- Money above 6% doesn’t vanish. The lender cuts the loan amount by the extra.
- VA caps concessions at 4% of the home’s reasonable value. Fannie Mae uses 3%, 6% or 9%, based on the down payment.
- A credit can net you more than a price cut. Run both numbers before you counter.
What is a seller concession in real estate?
A seller concession is money the seller agrees to pay toward the buyer’s costs, written into the purchase contract. It generally can’t pay the buyer’s down payment, though. It shows up as a credit to the buyer on the closing statement. FHA loans can also be assumed, and what you’d pay to take over a seller’s mortgage works differently. The sale price stays the same. The seller just nets less.
Buyers ask for them because cash runs short at closing, not because they want a cheaper house. Lender fees, title, prepaid taxes and insurance can add up fast. A buyer’s concession request is often the line that decides whether the deal closes. For the full buyer-side picture, our FAQ on what seller concessions are and how buyers ask for them covers the basics.
This page is for the other side of the table. You own the home, you sell it yourself, and an offer arrives with “FHA” in the financing box and a request for a credit. What can you agree to, and what’s the smart counter?
What is the FHA seller concession limit?
Six percent of the sales price. HUD’s letter put it this way: the seller’s maximum contribution to the buyer’s closing costs, prepaid expenses, discount points and other financing concessions “remains at 6 percent of the sales price.” Seller money above that requires a dollar-for-dollar cut to the mortgage.
HUD’s rules now sit in the Single Family Housing Policy Handbook 4000.1, which HUD keeps updating (the latest redline listed is August 12, 2026). Your buyer’s lender works from the current handbook, so let them confirm the final figure for your deal.
Here’s what 6% looks like at a few prices. The NAR median is from its September 2026 report.
| Sales price | FHA cap (6%) | A 3% credit |
|---|---|---|
| $240,000 | $14,400 | $7,200 |
| $300,000 | $18,000 | $9,000 |
| $417,500 (U.S. median, September 2026) | $25,050 | $12,525 |
| $500,000 | $30,000 | $15,000 |
Two things trip sellers up. First, the cap is a ceiling, not a target. Most FHA buyers ask for far less than 6%, because their actual costs are lower. Second, a credit only pays real costs. If you offer $15,000 and the buyer’s costs come to $11,000, expect the lender to refuse the extra $4,000 as cash back. Fannie Mae’s guide says it in writing for conventional loans, and FHA lenders apply the same logic.
Where do NAR’s numbers come from? The NAR, Existing-Home Sales Increased 1.5% in September release put the median at $417,500.
FHA vs VA vs conventional: how do concession limits compare?
Each loan type has its own ceiling, and they’re measured on different bases. Ask which loan the buyer is using before you talk numbers.
| Loan | Concession limit | Measured on |
|---|---|---|
| FHA | 6% | Sales price |
| VA | 4% (normal closing-cost credits sit outside it) | The home’s reasonable value |
| Conventional, Fannie Mae, under 10% down | 3% | Lower of price or appraised value |
| Conventional, 10% to 25% down | 6% | Lower of price or appraised value |
| Conventional, more than 25% down | 9% | Lower of price or appraised value |
| Conventional, investment property | 2% | Lower of price or appraised value |
VA works a bit differently. Its page says sellers can offer credits for some or all of the buyer’s closing costs, and that “seller’s concessions” can’t top 4% of the home’s reasonable value. VA counts things like paying the funding fee, paying off a buyer’s debt or prepaying hazard insurance as concessions. If you’re selling near a base, our guide to selling your house during a PCS move covers VA buyers too.
For conventional loans, the Fannie Mae Selling Guide, Interested Party Contributions lists the 3%, 6% and 9% tiers. Fannie also counts the real estate agent as an interested party, so an agent’s credit falls under the same cap.
How should a FSBO seller answer a concession request?
Start with your net, not the headline price. Say you listed at $315,000. An FHA buyer offers $310,000 and asks for $9,000 toward closing costs. A second buyer, paying cash, offers $302,000 with no credit.
- FHA offer: $310,000 minus $9,000 credit nets $301,000 before your other costs.
- Cash offer: $302,000 nets $302,000 before your other costs.
On paper the cash offer wins by $1,000. But the FHA price supports your comps, and you may only have one offer. That’s the real trade.
| Your counter | What you send | Your net before costs |
|---|---|---|
| Accept as written | $310,000 with a $9,000 credit | $301,000 |
| Raise price, keep credit | $313,000 with a $9,000 credit | $304,000 |
| Split the credit | $310,000 with a $5,000 credit | $305,000 |
| Trade credit for speed | $310,000 with $7,000 if they close in 30 days | $303,000 |
Raising the price to cover the credit only works if the home appraises at the higher number. More on that below. Also ask for the buyer’s pre-approval letter before you counter. A big credit for a buyer who can’t close helps nobody.
Buyers may also ask you to pay their agent. You decide. Commissions aren’t set by law or NAR rules, they’re fully negotiable, you choose whether to offer any buyer-agent pay, and since August 17, 2024 those offers can’t appear on the MLS (NAR, Settlement FAQs). A request to pay the agent counts toward the buyer’s costs in the same deal, so look at the total.
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On homes listed by other agents, Beycome credits you up to 2% of the price at closing (1% kept, $1,499 minimum; not on FSBO homes or homes listed by Beycome sellers).
Buy a home →Want comps first? Search homes recently sold on Beycome, check local price trends on Homes.com, or run your address through our property price estimator. Our page on setting the right price to sell your home goes deeper, and these rules of negotiation help when the talks drag.
Credits matter more when rates are high. Check this week’s rate on Freddie Mac’s Primary Mortgage Market Survey. If it’s up, expect more buyers to ask for help with closing costs or discount points to buy down the rate. Points count inside FHA’s 6%.
What happens to concessions after a low appraisal?
FHA lends on the lower of the price or the appraised value. Say you agree on $313,000 with a $9,000 credit, and the appraisal says $305,000. The buyer now needs $8,000 more cash, or the deal has to change.
Your options are simple to list and hard to choose:
- Drop the price to $305,000 and keep the credit.
- Keep the price and cut the credit, so the buyer’s cash need stays the same.
- Meet in the middle on both.
- Let the buyer cancel under the appraisal contingency and relist.
Ask for a copy of the report. If the appraiser missed a recent sale on your street, the buyer’s lender can ask for a reconsideration of value. Our guide to home appraisal costs and how appraisals work explains the process, and what to do after you accept an offer covers the weeks that follow.
Do you need help negotiating concessions?
No, it’s not required; it’s your choice. An agent brings experience with these requests and charges a commission for it. Handling it yourself keeps that cost and every decision with you, but you do the reading. A real estate attorney can review the contract either way, and our list of reasons to consult legal professionals applies to sellers too.
On Beycome Basic and Enhanced, Artur, our AI assistant, helps you read offers and plan a counter, and you negotiate yourself. With Beycome Concierge (see current price), a dedicated expert negotiates with you, always on your side, and every decision stays yours. You can also update your listing price anytime from the dashboard. Beycome has helped 22,000+ sell or buy, saving over $225 million (Beycome internal data, October 2026). For the bigger picture, read selling your home without a realtor or how to sell FSBO with flat fee MLS tools. Cash buyer instead? See the do’s and don’ts of negotiating a cash offer.
Closing in Florida or Texas? Beycome Title handles the settlement: $99 prepaid in Florida, $299 per side in Texas. It opens in Michigan, Ohio, Illinois and Indiana starting November 2, 2026. Curious how a buyer reads these offers? Our guide on who pays the buyer’s agent on a FSBO home shows their side, and who pays closing costs when selling breaks down the rest.
FHA seller concession questions
What are FHA seller concessions?
They’re seller-paid credits toward an FHA buyer’s closing costs, prepaid items and discount points. HUD caps them at 6% of the sales price; anything above that reduces the loan amount dollar for dollar.
What is a seller concession?
Money the seller agrees, in the contract, to pay toward the buyer’s costs. It appears as a credit to the buyer at closing, and the seller nets less.
Can FHA seller concessions be more than 6%?
Not as a credit. HUD’s rule says seller contributions above 6% of the sales price require a dollar-for-dollar cut to the mortgage. Your buyer’s lender confirms the figure under the current Handbook 4000.1.
Is a closing cost credit better than lowering the price?
Often, yes. A credit helps a buyer who is short on cash and keeps your sale price closer to your comps. Compare your net on both versions before you counter.
What is the VA seller concession limit?
VA limits seller concessions to 4% of the home’s reasonable value. Sellers can still credit normal closing costs; items like the funding fee or paying off buyer debt count toward the 4%.
Do I have to pay the buyer’s agent if I sell by owner?
No. A buyer can ask for it in the offer and you decide. Commissions are negotiable and not set by law, and offers of compensation can’t appear on the MLS since August 17, 2024. Buyers often ask if they can finance the commission instead.
What happens if the home appraises below the contract price?
The lender lends on the lower value, so the buyer needs more cash. You can lower the price, trim the credit, meet in the middle, or let the buyer cancel under the appraisal contingency.
Loan limits: HUD Mortgagee Letter 2006-04 and the Single Family Housing Policy Handbook 4000.1 page; VA funding fee and closing costs page; Fannie Mae Selling Guide B3-4.1-02. All read November 1, 2026. Lenders can set stricter rules. Price examples are illustrations, not a valuation of your home.
Commissions are not set by law or by NAR rules and are fully negotiable. Sellers choose whether to offer any compensation to a buyer’s agent, and how much; since August 17, 2024, those offers can’t be shown on the MLS.
Beycome prices as of November 2026: Basic from $99 in most states (see your state page); Concierge, see current price. “$0 at closing” means no Beycome fee at closing; other closing costs, taxes, title and any credits or buyer-agent pay you agree to still apply. Beycome Title: Florida and Texas today; Michigan, Ohio, Illinois and Indiana starting November 2, 2026. General information, not legal or lending advice; rules vary by state, lender and MLS.
Sources
- HUD, Mortgagee Letter 2006-04, Revised Borrower’s Closing Costs Guidelines (January 27, 2006), read November 1, 2026.
- HUD, Single Family Housing Policy Handbook 4000.1 (update list, latest August 12, 2026), read November 1, 2026.
- VA, VA funding fee and loan closing costs, read November 1, 2026.
- Fannie Mae Selling Guide, Interested Party Contributions, read November 1, 2026.
- NAR, Existing-Home Sales Increased 1.5% in September, read October 28, 2026.
- NAR, Settlement FAQs, read October 28, 2026.
- Freddie Mac, Primary Mortgage Market Survey, read November 1, 2026.
- Beycome, listing package features, November 2026.
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