Purchase costs

How do seller concessions work with a VA-backed home loan?

VA distinguishes certain seller concessions from ordinary seller-paid closing costs. The type of cost, negotiated contract, reasonable value, funding-fee treatment, lender review, and current VA limitations determine whether a proposed credit or payment fits the transaction.

What this page does not decide

This page cannot approve a concession, draft contract language, calculate cash to close, determine reasonable value, or promise that a seller or lender will pay a cost.

Separate the official record from the surrounding facts.

Type of seller payment

Ordinary closing costs and discount points may be treated differently from items VA classifies as seller concessions.

Four-percent limitation

VA describes a four-percent cap for seller concessions, but not every seller-paid cost is necessarily counted in that category.

Reasonable value and contract

The appraisal, contract price, negotiated terms, and lender calculation must be reviewed together.

Cash-to-close effect

A credit can change funds needed at closing, but deposits, prepaid items, financing, and other transaction figures still matter.

Find the branch that resembles your question.

The seller offers to pay costs

Ask the lender to classify each proposed payment rather than applying one percentage to every seller-paid item.

A temporary buydown is proposed

VA treats a seller- or builder-funded temporary buydown as a seller concession and requires qualification at the full note payment.

The seller may pay the funding fee

VA’s buyer guidance says another party may pay the funding fee; confirm how it appears in the final transaction figures.

Use this decision path.

Organize only non-sensitive facts. Do not send private service, identity, credit, tax, income, or account records through this site.

  1. List each proposed seller-paid item separately.
  2. Ask the lender which items are ordinary closing costs and which are VA seller concessions.
  3. Compare the concession calculation with reasonable value, the contract, and final disclosures.
  4. Have the appropriate real-estate and mortgage professionals review contract language before signing.

Verify the current VA guidance.

Program guidance can change. Review the official sources supporting this page.

VA Home Loan Buyer’s Guide

Supports: Negotiable purchase terms, funding-fee payment, seller-paid costs, and seller-concession orientation.

Official VA buyer guide checked July 28, 2026

VA: Temporary buydowns

Supports: Seller-concession treatment and underwriting considerations for temporary buydowns.

VA page last updated January 14, 2026; checked July 28, 2026