Seller Concessions in NH: 2026 Limits by Loan Type

Seller concessions in New Hampshire allow a home seller to contribute toward a buyer's eligible closing costs, prepaid expenses, and certain mortgage financing charges. Depending on the loan program, these credits may significantly reduce the amount of cash a buyer needs at closing.

For conventional loans, seller contribution limits generally range from 2% to 9%, depending on occupancy and loan-to-value ratio. FHA and USDA loans generally allow up to 6%, while VA loans follow a different structure that permits payment of customary closing costs plus certain additional concessions.

However, the maximum percentage is not necessarily the amount you can use. Your actual closing costs, appraisal, mortgage program, and lender requirements determine how much seller assistance can be applied.

This guide explains seller concession limits for New Hampshire homebuyers, what sellers can pay, how to negotiate credits, and when a lower purchase price may be a better deal.

What Are Seller Concessions?

Seller concessions are contributions negotiated between a property buyer and seller that help cover eligible costs associated with purchasing the home.

They are also commonly called seller credits, seller-paid closing costs, or seller contributions.

Instead of giving the buyer money directly, the seller agrees to pay an approved amount through the closing transaction.

For example, suppose you're purchasing a $400,000 home in Nashua, New Hampshire.

Your estimated closing costs total $12,000, and the seller agrees to provide an $8,000 credit.

Assuming the credit is permitted under your loan program and all costs are eligible:

• Purchase price: $400,000

• Estimated closing costs: $12,000

• Negotiated seller credit: $8,000

• Remaining closing costs: $4,000

The seller credit reduces your closing costs from $12,000 to $4,000. Your required down payment, if any, remains separate.

The key distinction: Seller concessions reduce eligible transaction expenses. They are not the same as down payment assistance or a reduction in the agreed purchase price.

For a complete overview of other expenses, read our New Hampshire closing costs guide.

How Do Seller Concessions Work?

Seller concessions are typically negotiated during the offer process, although credits may also be negotiated later, such as following a home inspection.

The process generally involves five steps.

Step 1: Estimate Your Closing Costs

Before making an offer, ask your mortgage professional to estimate your required down payment, closing costs, prepaid expenses, and cash to close.

This helps you determine how much seller assistance could actually benefit your transaction.

Step 2: Include the Seller Credit in Your Offer

Your real estate agent may include a request for seller-paid closing costs in the purchase agreement.

The request may be expressed as a fixed dollar amount, a percentage of the purchase price, or another lender-approved structure.

Step 3: Negotiate With the Seller

The seller may accept the request, counteroffer, or decline.

The seller evaluates the total economics of your offer, including the purchase price, requested credits, financing, contingencies, and closing timeline.

Step 4: Obtain Lender Approval

Your lender reviews the proposed contribution against the mortgage program's requirements.

The lender also verifies that the contribution can be applied to eligible expenses without creating an excessive concession or property valuation problem.

Step 5: Review Your Closing Disclosure

Approved seller credits appear on your Closing Disclosure, either as a general Seller Credit or as specific seller-paid expenses.

Check that the final credit matches the purchase agreement and lender approval.

Seller concessions do not eliminate your obligation to meet the other financing conditions in your mortgage contract.

How Much Can a Seller Contribute to Closing Costs in 2026?

Seller contribution limits depend on the mortgage program, property use, and sometimes the amount of the buyer's down payment.

Here is a comparison of the general program limits.

For conventional financing, contribution limits are based on the lesser of the property's purchase price or appraised value, subject to applicable combined loan-to-value rules.

FHA and USDA have their own calculation requirements, while VA uses the property's established reasonable value for its 4% additional-concession limitation.

These percentages represent program ceilings, not guaranteed seller contributions. Eligible expenses, negotiated terms, and lender underwriting may result in lower usable amounts.

Conventional Loan Seller Concession Limits

Conventional mortgage seller contribution limits are established through applicable Fannie Mae or Freddie Mac guidelines.

For eligible primary residences and second homes, the maximum percentage generally increases as the down payment increases.

Less Than 10% Down: 3% Limit

A conventional borrower putting less than 10% down generally has a maximum financing concession of 3%.

For example, on a $450,000 home with a 5% down payment:

Maximum seller contribution:

$450,000 × 3% = $13,500

This assumes the purchase price does not exceed the relevant appraised-value calculation and that sufficient eligible costs exist.

10% to Less Than 25% Down: 6% Limit

For qualifying borrowers with loan-to-value ratios from 75.01% through 90%, the general limit increases to 6%.

On a $450,000 home:

$450,000 × 6% = $27,000

However, if eligible closing costs total only $11,000, the buyer generally cannot use the additional $16,000 as cash or an extra down payment.

25% or More Down: 9% Limit

For qualifying primary residences and second homes with loan-to-value ratios of 75% or less, the financing concession limit generally increases to 9%.

On a $450,000 home:

$450,000 × 9% = $40,500

The actual usable contribution remains limited by the transaction's eligible expenses and underwriting requirements.

Investment Properties: 2% Limit

For conventional investment-property financing subject to Fannie Mae guidelines, the seller financing concession limit generally remains 2%, regardless of the down payment.

This is materially different from the rules for primary residences and second homes.

Investors comparing property financing structures can explore our home loan programs.

Important: Conventional financing concessions that exceed applicable limits may be treated as sales concessions, requiring adjustments to the transaction value used in underwriting. Excess credits should not be assumed to be harmless or automatically available to the buyer.

FHA Seller Concessions: The 6% Rule

FHA-insured mortgage loans generally allow interested parties to contribute up to 6% of the property's sales price toward eligible borrower expenses.

This can help buyers using an FHA mortgage with a relatively small down payment preserve more of their own funds for other expenses.

Eligible contributions may include:

• Mortgage origination charges

• Approved closing costs

• Prepaid expenses

• Discount points

• Eligible interest-rate buydowns

• Upfront FHA mortgage insurance charges, subject to applicable requirements

FHA Seller Concession Example

Assume you purchase a $375,000 home using an FHA mortgage.

Maximum general concession calculation:

$375,000 × 6% = $22,500

If your eligible closing costs are $13,000, the seller generally cannot simply provide the remaining $9,500 as unrestricted cash.

The transaction must remain compliant with FHA requirements, including rules on interested-party contributions and inducements to purchase.

Can FHA Seller Concessions Cover the Down Payment?

No.

FHA requires an eligible minimum investment from the borrower, although approved gift funds or assistance programs may be used to satisfy that requirement.

A seller credit cannot be substituted for the buyer's required minimum down payment.

Learn about FHA loan options and how these programs compare with other mortgage financing.

VA Loan Seller Concessions: The 4% Rule Explained

VA loans treat seller-paid closing costs differently from many other mortgage programs.

The VA generally permits the seller to pay the buyer's normal eligible closing costs without counting those payments toward the separate 4% seller-concession limit.

Additional benefits classified as seller concessions are generally limited to 4% of the property's established reasonable value.

What Counts Toward the VA 4% Limit?

Examples may include:

• Payment of the borrower's VA funding fee

• Certain prepaid taxes and insurance

• Payment of certain borrower debts or judgments

• Other qualifying benefits classified as seller concessions

Normal discount points and customary buyer closing-cost payments generally do not count toward that separate 4% limit.

VA Seller Concession Example

Suppose an eligible veteran buys a home with an established reasonable value of $400,000.

The maximum additional-concession calculation is:

$400,000 × 4% = $16,000

That does not automatically mean the seller can provide $16,000 in unrestricted funds.

The contribution must be used in an eligible manner, comply with the purchase agreement, and satisfy VA and lender guidelines.

Customary closing costs may be paid separately from the additional-concession limit.

For qualifying veterans using zero-down financing, seller contributions can be particularly useful in reducing cash-to-close requirements.

However, zero down payment and zero cash to close are not the same.

See our VA home loan options for eligibility and financing details.

USDA Seller Concessions: The 6% Limit

USDA-guaranteed home loans generally permit seller or other interested-party contributions up to 6% of the property's sales price, subject to eligible financing purposes and program rules.

Because USDA-guaranteed loans may provide 100% purchase financing to qualifying borrowers, seller credits can help address upfront expenses not otherwise covered.

Important November 2026 USDA Update

Effective November 9, 2026, USDA clarified its regulation to exclude real estate commission fees from the 6% interested-party concession limitation.

The change helps distinguish eligible real estate commission payments from other seller-funded contributions under the USDA Guaranteed Loan Program.

It does not eliminate the 6% limitation for other contributions subject to the rule.

USDA Seller Concession Example

Suppose a qualified borrower purchases an eligible $350,000 home.

The general 6% calculation is:

$350,000 × 6% = $21,000

That is a maximum contribution threshold, not a guaranteed payment or an amount the buyer can receive directly.

Actual eligible charges and lender approval determine the usable credit.

USDA financing is available only for qualifying borrowers and properties. Both property location and household-income requirements must be satisfied.

Learn more about USDA home loans in New Hampshire.

What Closing Costs Can Seller Concessions Cover?

Depending on the mortgage program and transaction, seller contributions may help pay several types of expenses.

Mortgage and Lender Fees

These may include:

• Loan origination charges

• Underwriting or processing fees

• Credit-related charges

• Discount points

Title and Settlement Expenses

Eligible costs may include:

• Title search and title insurance

• Settlement or closing services

• Attorney fees, when applicable

• Recording charges

• Certain other third-party transaction fees

Prepaid Expenses

Depending on program guidelines, seller contributions may help cover:

• Homeowners insurance premiums

• Prepaid mortgage interest

• Property tax prepayments

• Initial escrow deposits

New Hampshire Real Estate Transfer Tax

New Hampshire imposes a real estate transfer tax on taxable property transfers.

The standard rate is currently $0.75 per $100 of consideration for the buyer and separately for the seller.

For a $400,000 purchase, the standard calculation is:

Buyer share: $3,000

Seller share: $3,000

Actual treatment can depend on the transaction and applicable exemptions.

The buyer's share may be an eligible expense when the seller agrees to contribute and the mortgage program permits it.

Because this tax is based on transaction consideration, increasing an offer price to obtain seller credits can also affect transfer-tax costs.

For a broader discussion of these expenses, see The Hidden Costs of Buying a Home in New Hampshire.

What Can't Seller Concessions Be Used For?

The permitted uses depend on the loan program, but seller contributions generally cannot be treated as unrestricted buyer funds.

Common restrictions include:

• Replacing the borrower's required down payment

• Satisfying required financial reserves using prohibited interested-party funds

• Giving the buyer unrestricted cash after closing

• Paying costs not permitted by the mortgage program

• Providing incentives that create prohibited underwriting or valuation issues

For conventional financing, an interested-party contribution that exceeds the allowed financing concession may require a reduction in the effective sales price used for underwriting purposes.

This is why the maximum theoretical credit should not be confused with the amount your lender can actually apply.

Seller Concessions vs. a Lower Purchase Price: Which Is Better?

A seller credit and a price reduction may produce similar seller proceeds, but they affect buyers differently.

Consider two illustrative offers:

From the seller's perspective, both offers produce $450,000 before other transaction expenses.

However, the buyer's financing consequences are not identical.

When Seller Concessions May Help More

A seller credit may make sense when you have sufficient income to qualify for the mortgage but need to preserve savings for closing costs.

It can also help when you want to use eligible credits toward discount points or other approved financing expenses.

When a Lower Price May Be Better

A lower purchase price may be preferable if it reduces the amount you need to borrow, lowers the required down payment, or improves your long-term borrowing costs.

A higher contract price can increase the mortgage balance, required investment, or transaction-based expenses.

The property must also appraise adequately.

Important: A higher offer price with seller concessions is not free money. Compare both structures using the full monthly payment, cash to close, and long-term financing costs.

Your real estate agent and mortgage professional should evaluate the proposed structure before you submit an offer.

Can Seller Concessions Be Used to Buy Down Your Mortgage Rate?

Yes. Certain mortgage programs permit seller contributions to fund eligible discount points or temporary interest-rate buydowns.

These strategies are not identical.

Permanent Mortgage Rate Buydown

A permanent buydown uses discount points to obtain a lower mortgage interest rate.

Whether the points provide good value depends on their cost, the rate reduction, the loan balance, and how long you expect to retain the mortgage.

Temporary 2-1 Buydown

A 2-1 temporary buydown uses funds to subsidize mortgage payments during the first two years.

In a typical structure:

• Year 1 payments are calculated using a rate two percentage points below the note rate.

• Year 2 payments are calculated using a rate one percentage point below the note rate.

• Year 3 onward payments are based on the full note rate.

The underlying mortgage note rate does not change.

Seller-funded temporary buydowns are subject to loan program, lender, funding, and qualification requirements.

Learn more in our Seller-Paid 2-1 Buydown Guide.

When Should You Ask for Seller Concessions in New Hampshire?

The right approach depends on the individual property, seller motivation, competing offers, and local market conditions.

New Hampshire markets can vary substantially between Manchester, Nashua, Portsmouth, Concord, the Lakes Region, and smaller communities.

A request that works for one property may be less competitive for another.

Situations Where Seller Concessions May Be Worth Requesting

A seller credit may be particularly useful when:

• The listing has received limited buyer interest.

• The property has been on the market longer than comparable listings.

• A home inspection identifies issues that may be addressed through an approved closing credit.

• The seller prefers to negotiate contributions rather than reduce the asking price.

• The buyer needs assistance with closing costs but otherwise has a viable financing plan.

When Seller Concessions May Weaken Your Offer

A seller may be less willing to accept additional credits when:

• Multiple buyers are competing.

• The seller has received attractive offers without concessions.

• Your purchase offer is already below the asking price.

• The requested concession would substantially reduce the seller's net proceeds.

• The proposed financing structure introduces appraisal or closing uncertainty.

Rather than assuming a particular county is always a buyer's or seller's market, review recent comparable sales, listing activity, and the property's specific circumstances.

How to Negotiate Seller Concessions Without Losing the Deal

A good negotiation strategy considers the seller's net proceeds and the buyer's financing requirements together.

1. Request a Specific Dollar Amount

A clear dollar request can be easier to evaluate than a large percentage-based request.

For example, if your lender estimates $9,500 in eligible closing costs, requesting a $9,500 seller credit may be more practical than automatically requesting the maximum percentage allowed.

2. Review the Seller's Net Proceeds

Sellers typically consider the purchase price after credits and other transaction expenses.

Compare offers based on the economic value they create for both parties.

Do not assume the seller will accept a larger nominal purchase price if the requested credit offsets that increase.

3. Coordinate With Your Mortgage Professional Before Making the Offer

Ask your lender to confirm:

• The maximum permitted contribution

• Your estimated eligible expenses

• Whether discount points or a buydown are available

• The effect of the proposed contract price on financing

• Any appraisal or underwriting considerations

4. Use Inspection Findings Appropriately

If an inspection reveals defects, the buyer and seller may negotiate repairs, a price adjustment, or an eligible closing credit.

However, a seller credit does not necessarily eliminate the lender's requirement to repair certain property conditions before closing.

5. Avoid Excessive Credits

Requesting more than you can use may complicate the transaction.

For example, a $20,000 seller credit does not automatically benefit a buyer whose eligible closing costs total $11,000.

Your mortgage professional should confirm the usable amount before the agreement is finalized.

Seller Concessions vs. Gift Funds vs. Down Payment Assistance

These financing tools can all help buyers manage upfront purchase expenses, but they serve different purposes.

Seller Concessions

Seller concessions are negotiated with a seller and are generally used for eligible closing costs and financing expenses.

They do not replace a required down payment.

Gift Funds

Gift funds are provided by an eligible donor without an expectation of repayment.

Depending on the mortgage program, properly documented gifts may help cover the buyer's required down payment or other permitted expenses.

Read our Gift Funds for Down Payment Guide.

Down Payment Assistance

Down payment assistance comes from qualifying programs that may offer grants, forgivable assistance, deferred loans, or repayable second mortgages.

New Hampshire buyers may qualify for assistance through NH Housing or other participating programs, depending on eligibility and funding availability.

See our New Hampshire Down Payment Assistance Programs Guide.

Can these options be combined?

Potentially. However, the combination must satisfy the first mortgage's requirements and the rules of each assistance source.

No combination should be assumed permissible before lender review.

Can Seller Concessions Help You Buy a Home With Little Cash at Closing?

Yes, depending on the mortgage program, your available funds, the permitted seller contribution, and the transaction's actual expenses.

For example, an eligible VA or USDA borrower may qualify for financing without a traditional down payment.

If the seller also agrees to cover sufficient eligible closing costs, the borrower may need less personal cash at settlement.

However, some expenses may still need to be paid before closing, including inspections, certain deposits, or other transaction-related charges.

Buyers using FHA or conventional financing must also satisfy any applicable down payment requirement with an acceptable source of funds.

For additional options, see our No-Money-Down Mortgage Guide for New Hampshire.

Pros and Cons of Seller Concessions

Potential Advantages

• Reduce eligible out-of-pocket closing expenses.

• Help buyers preserve savings after purchasing a home.

• Provide funding for eligible mortgage rate buydowns.

• Offer flexibility during contract negotiations.

• Make certain home purchases more manageable for buyers with limited available cash.

Potential Disadvantages

• May make an offer less competitive.

• Can increase financing costs if paired with a higher purchase price.

• Must comply with strict program limits.

• Cannot replace a required down payment.

• May introduce appraisal or underwriting complications.

• Cannot provide unrestricted cash beyond approved expenses.

Whether seller concessions make sense depends on your purchase structure, financing terms, and negotiated agreement.

How NextGen Mortgage Loans Can Help

NextGen Mortgage Loans is a mortgage broker headquartered in Nashua, New Hampshire, helping buyers compare financing options across multiple lending partners.

When you're evaluating seller concessions, the objective is not simply to request the largest possible credit.

It's to structure your purchase so that the credit is permitted, useful, and aligned with your financing goals.

Our mortgage team can help you:

• Compare FHA, VA, USDA, and conventional financing options.

• Review estimated closing costs.

• Calculate permitted seller contribution limits.

• Understand how seller credits affect cash to close.

• Evaluate eligible buydown options.

• Coordinate financing questions with your real estate agent.

Explore our Home Purchase Loans in New Hampshire to compare your mortgage options.

Frequently Asked Questions

What is the maximum seller concession on a conventional loan?

For conventional loans subject to standard Fannie Mae guidelines, eligible primary residences and second homes generally allow financing concessions of 3%, 6%, or 9%, depending on the loan-to-value ratio. Investment properties generally have a 2% limit. The percentage is calculated using the lower of the purchase price or appraised value, and the actual contribution cannot exceed eligible expenses.

What is the FHA seller concession limit in 2026?

FHA-insured loans generally permit interested-party contributions of up to 6% of the property's sales price toward eligible financing expenses. This may include closing costs, prepaid expenses, discount points, and certain other approved charges. The contribution cannot be used as a substitute for the borrower's required minimum investment.

How much can a seller contribute on a VA loan?

VA rules generally allow sellers to pay customary buyer closing costs separately from the 4% additional seller-concession limitation. The 4% limit is based on the property's established reasonable value and applies to certain benefits such as payment of the VA funding fee, eligible prepaid expenses, or other qualifying concessions.

What is the USDA seller concession limit in 2026?

USDA-guaranteed loans generally allow eligible interested-party contributions of up to 6% of the property's sales price. Effective November 9, 2026, USDA clarified that real estate commission fees are excluded from this 6% calculation. Other contributions remain subject to applicable USDA rules.

Can seller concessions be used for a down payment?

Generally, no. Seller-paid closing cost credits cannot replace a borrower's required down payment under conventional, FHA, or USDA financing. Buyers who need help with a down payment may explore approved gift funds or eligible assistance programs. VA loans may not require a down payment for qualifying borrowers and transactions.

Do seller concessions reduce the purchase price?

Not directly. A seller concession typically appears as a transaction credit rather than a reduction in the agreed contract price. However, excessive financing concessions may require adjustments to the effective sales price used in mortgage underwriting, and buyers and sellers can separately negotiate a lower purchase price.

Do seller concessions reduce my monthly mortgage payment?

Not automatically. If the purchase price and mortgage terms remain unchanged, a seller credit covering closing costs generally reduces cash to close rather than the scheduled monthly payment. Using permitted seller funds for discount points or a temporary buydown may affect payment calculations. Increasing the purchase price to obtain credits can also increase the amount financed.

Can the seller pay all my closing costs?

Possibly. The seller may be able to pay all eligible closing costs if the requested contribution is within the applicable mortgage program limits and the transaction satisfies lender requirements. The seller must also agree to the credit. Certain program-specific restrictions may apply.

What happens if seller concessions exceed my closing costs?

The buyer generally cannot receive the unused excess as unrestricted cash. Depending on the mortgage program, excess contributions may require a transaction adjustment, revised financing calculation, or a negotiated change to the purchase agreement. The lender should review excess contributions before closing.

Are seller concessions taxable income for the buyer?

Seller credits applied through a qualifying home purchase transaction are generally not treated like ordinary cash income, but their tax treatment can depend on the facts and how the costs are allocated. They may also affect the tax basis or treatment of certain expenses. Buyers should consult a qualified tax professional rather than assuming every concession has identical tax consequences.

Are seller concessions negotiable in New Hampshire?

Yes. A seller is not generally required to pay a buyer's closing costs simply because the mortgage program permits contributions. The amount and structure of any seller credit are negotiated as part of the purchase agreement, subject to the financing program and applicable law.

Compare Your Home Purchase Options in New Hampshire

Seller concessions can reduce upfront homebuying expenses, but their value depends on your mortgage program, the costs you need to cover, and the terms you negotiate.

Before requesting a credit, make sure you understand the contribution limit, your estimated cash to close, and whether a lower purchase price or alternative financing structure could be more beneficial.

NextGen Mortgage Loans can help you compare available mortgage options and evaluate how permitted seller contributions fit your purchase.

Planning to buy a home in New Hampshire?

Explore Home Purchase Loans or Contact NextGen Mortgage Loans to discuss your financing options.

Mortgage program information reviewed November 2026. Program limits, interested-party contribution rules, lender overlays, and transaction requirements may change. All financing is subject to applicable underwriting and approval. This article provides general educational information and is not legal, tax, or financial advice.