The amount of assistance the seller is allowed to contribute depends on the type of mortgage loan. Provided are the basic types of loans and allowable seller credits:

Conventional Loans
On a conventional loan, the seller can only pay non-recurring costs. These do not include pre-paid items or items to be paid in advance (such as mortgage insurance or hazard insurance). The seller's contribution is limited to the amount the buyer is putting down. If the buyer puts 10 percent or more down, the seller may contribute up to 6 percent. If the buyer puts less than 10 percent, the most the seller may contribute is 3 percent.

VA Loans
On a VA loan, the seller may pay all the closing costs (the buyer pays no down payment and no closing costs). Seller's may also pay up to an additional 4 percent on top of paying all points, closing costs, etc., in order to pay of the purchase debts to allow easier loan qualification. Sellers who agree to pay the closing costs for VA loans often put a limit on the amount they will pay

FHA Loans
On an FHA loan, the seller may pay closing costs but only up to a maximum of 6 percent of the loan amount.

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