SELLER CONCESSIONS

Seller concessions include but are not limited to the following:

• Payment of the buyer's VA funding fee
  
• Prepayment of the buyer's property taxes and insurance
  
• Gifts such as a television set or microwave oven
  
• Payment of extra points to provide permanent interest rate buydowns
• Provision of escrowed funds to provide temporary interest rate buydowns, and
• Payoff of credit balances or judgments on behalf of the buyer.

• Payment of the buyer's closing costs, or
  
• Payment of points as appropriate to the market

Example: If the market dictates an interest rate of 61/2% with 2 discount points, the seller's payment of the 2 points would not be a seller concession. If the seller paid 5 points, 3 of these points would be considered a seller concession.

Seller Concession Limit of 4% 

Any seller concession or combination of concessions which exceeds 4% of the established reasonable value of the property is considered excessive for VA loan purposes.

Do not include normal discount points and payment of the buyer's closing costs in total concessions for determining whether concessions exceed the 4% limit.