Lender guidelines typically cap closing credits at 2-6% of the purchase price depending on the loan type and down payment. Conventional loans with 20%+ down usually allow up to 6%. FHA loans cap at 6%. If the buyer requests a credit exceeding lender limits, the transaction structure breaks. Always confirm the buyer's lender-allowable credit maximum before agreeing to any concession amount.
From the seller playbook: Concession Control: Credits vs. Price Reductions
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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