What counts as a seller concession?
VA describes seller concessions as value added to the transaction at no additional cost to the buyer. Examples can include paying the VA funding fee, paying certain buyer credit balances or judgments, or prepaying certain expenses such as hazard insurance. Temporary buydowns funded by the seller or builder are also treated as concessions.
What sits outside the 4% concession cap?
Normal buyer closing costs and customary discount points are not added to the seller-concession total for purposes of the 4% limit. That means total seller-paid assistance can be more than 4% when part of it is paying allowable normal closing costs.
Example on a $500,000 VA value
If the seller pays $10,000 of allowable normal closing costs plus $20,000 of qualifying seller concessions, the total seller-paid help is $30,000, or 6% of the $500,000 value. The concessions themselves are 4%, while the normal closing costs are analyzed separately.
Why the contract language matters
Credits should be written with enough flexibility for the lender and settlement agent to apply them to allowable charges. Your loan team should confirm the final use of credits before closing so money is not left unused or structured incorrectly.
Can the seller pay off my debt?
VA identifies payment of a buyer’s credit balances or judgments as a seller concession. That means those amounts generally count inside the 4% concession bucket.
Official sources
VA rules and lender guidelines can change. These pages are reviewed against official VA resources and should be used as education—not as a substitute for a lender’s review of your specific file.