source:
  type: guide
  id: va-m26-7-ch08-t05
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 5 — Seller Concessions
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 5 — Seller
    Concessions.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch08-t05-full
  canonical_id: va-m26-7-ch08-t05-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 5 — Seller Concessions
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 8, Topic 5 — Seller
      Concessions
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 8f28fe2bcf1f2e28
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:44aecfeb4beae872a5dbb59f87b324e1fc8730143eaf4185b6cb0d71698e60f3
    paragraph_quote: '5. Seller Concessions Change Date November 08, 2010, Change
      15 • This section has been updated to make minor grammatical edits. a. Definition
      For the purposes of this topic, a seller concession is anything of value added
      to the transaction by the builder or seller for which the buyer pays nothing
      additional and which the seller is not customarily expected or required to pay
      or provide. b. 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. Seller concessions
      do not include 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 7½ percent with two discount points, the seller’s payment of the two points
      would not be a seller concession. If the seller paid five points, three of these
      points would be considered a seller concession. c. The Problem In some localities,
      builders or sellers offer concessions as a competitive tool. In extreme cases,
      the concessions may entice unwary and unqualified veterans into home mortgages
      they cannot afford. The concessions may disguise the veteran’s inability to
      qualify for the loan. Continued on next page VA Pamphlet 26-7, Revised Chapter
      8: Borrower Fees and Charges and the VA Funding Fee 8-13 5. Seller Concessions,
      Continued d. The Four Percent Limit Any seller concession or combination of
      concessions which exceeds four percent of the established reasonable value of
      the property is considered excessive, and unacceptable for VA-guaranteed loans.
      Do not include normal discount points and payment of the buyer’s closing costs
      in total concessions for determining whether concessions exceed the four percent
      limit. VA Pamphlet 26-7, Revised Chapter 8: Borrower Fees and Charges and the
      VA Funding Fee 8-14'
  judgment: false
