Sales concessions vs. financing concessions
A seller paying closing costs is different from a seller giving the buyer a car, furniture allowance or cash-like rebate.
Financing concessions
These are eligible interested-party contributions used for permitted borrower closing costs within the applicable percentage limits.
Sales concessions
Freddie identifies cash or cash-like contributions, furniture, automobiles, securities, vacations and other giveaways as sales concessions. Excess financing concessions can also become sales concessions.
Why it matters
Sales concessions can reduce the effective purchase price used for LTV calculations. That can change maximum loan amount, mortgage insurance and eligibility.
Official guide baseline
Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide
Program terms, AUS findings and lender overlays control. DPA program eligibility must also be verified with the program administrator.