When structuring real estate transactions to meet Fannie Mae, Freddie Mac, FHA, VA, and community products, agents should keep in mind the following allowable seller contributions for closing costs and prepaids:

Conventional Loans

            Primary & Second homes

                        90% to 100% loan-to-value:  3%

                        75% to 90% LTV:  6%

                        Up to 75% LTV:  9%

            Investment properties

                        2% maximum, regardless of LTV

FHA Loans

            6% plus 3% for down payment assistance through a third party

VA Loans

            4% regardless of LTV

First-time homebuyer community programs

            3% to 6%

Seller contributions are based on the lesser of the sale price or the appraised value of the property.  Comparing similar active listings and sold homes in the area is critical.