Seller concessions and closing cost credits in Utah and Idaho

NAR's consumer guide defines it simply: "A concession is when a seller pays for certain costs associated with purchasing a home for the buyer." In practice, most concessions are a single dollar amount credited to the buyer at closing. It's usually called a seller credit or closing cost credit, and the buyer's lender applies it to the buyer's closing costs.

Lenders use their own vocabulary. Fannie Mae calls these interested party contributions (IPCs), meaning contributions from parties with a vested interest in the sale, including the seller, the builder and the real estate agents. FHA uses the same term. VA uses "seller concessions" for a narrower group of items. Your contract and the lender's paperwork may use any of these names for the same money.

• Closing cost credit: a lump sum toward the buyer's lender fees, title and escrow charges, appraisal and similar costs.
• Prepaid items: the buyer's first year of homeowners insurance, property tax and insurance reserves, and prepaid interest.
• Rate buydown: money for discount points that lower the buyer's rate permanently, or a temporary buydown escrow.
• Repair credit: money in place of repairs after the inspection. Loan programs don't always treat these like closing cost credits, as explained below.
• Buyer's agent fee: since the 2024 NAR settlement, sellers can also agree to pay toward the buyer's agent. That is covered on /selling-costs/buyer-agent-commission/.

A concession is a cost of selling, like the other items on your settlement statement. To see how it changes what you walk away with, add it as a seller-paid cost in the net sheet at /selling-costs/.

Neither Utah nor Idaho law caps seller concessions. The limits that matter come from the buyer's loan program. They apply to all interested party contributions combined, not only yours. Ask early what type of loan the buyer is using, because that sets the ceiling.

Sources: Fannie Mae Selling Guide B3-4.1-02; HUD Handbook 4000.1 (updated Aug. 12, 2026); VA Lenders Handbook, Chapter 8, Topic 5; 7 CFR 3555.102(h). Freddie Mac has its own limits, and individual lenders can be stricter. The buyer's loan officer has the final number for a specific loan.

VA works differently from the others. Its handbook says seller concessions "do not include payment of the buyer's closing costs, or payment of points as appropriate to the market." What counts toward the 4% includes paying the buyer's VA funding fee, prepaying their taxes and insurance, gifts such as appliances or electronics, extra points to buy down the rate, temporary buydown funds, and paying off the buyer's debts. A VA buyer can therefore receive a closing cost credit larger than 4%, as long as the items that VA counts stay within the limit.

Cash buyers have no loan program, so no lender limit applies. A concession is still part of the deal and should be written into the contract.

Each program limits how the money is used as well as the amount.

• Fannie Mae: financing concessions may pay the buyer's closing costs, including prepaids, and HOA assessments for up to 12 months after closing. Fannie Mae doesn't allow IPCs for the down payment, financial reserves or the buyer's minimum contribution. Non-realty items such as furniture, cars, decorator allowances and moving costs are sales concessions. They are deducted from the price before the loan-to-value is calculated.
• FHA: contributions may pay origination fees, other closing costs (including items paid outside closing), prepaid items and discount points. The 6% also covers rate buydowns, mortgage interest payments, mortgage payment protection insurance and the upfront mortgage insurance premium. They may not pay the buyer's minimum required investment (MRI), FHA's down payment.
• VA: the seller can pay the buyer's closing costs and market-rate points without counting them toward the 4%. The items listed in the previous section do count.
• USDA: the regulation lists mortgage financing costs, closing costs, escrow accounts, furniture and other giveaways as seller concessions, all within the 6%.

A credit also can't be more than the buyer's actual costs. Fannie Mae treats any contribution above the buyer's closing costs as a sales concession that reduces the price. FHA calls contributions above actual costs, or above 6%, an inducement to purchase and deducts them from the price used for the loan. Either way, the buyer generally doesn't get the leftover as cash.

Agree to a credit only up to what the buyer's lender confirms they can use. If you agree to $15,000 and the buyer's allowable costs come to $11,000, the extra $4,000 has to be dealt with. It might lower the price, go unused, or require an amendment. Utah's FHA/VA Loan Addendum handles this in advance: at the buyer's option, any unused amount reduces the purchase price.

For you, a $10,000 credit and a $10,000 price cut are close to the same. Either way you receive about $10,000 less. The difference is on the buyer's side. A credit lowers the cash the buyer needs at closing. A price cut lowers the loan and the monthly payment by a small amount. Buyers short on cash often prefer the credit.

Hypothetical example (not a quote or a market figure): a $500,000 home, a conventional buyer with 5% down, a 6.5% 30-year fixed rate, and $12,000 in buyer closing costs.

What the example shows:

• Option A saves the buyer $9,500 in cash at closing. It costs them about $60 a month in principal and interest.
• The credit fits Fannie Mae's limit. At 95% LTV the cap is 3%, which is $15,000 here, and the credit doesn't exceed the buyer's $12,000 in closing costs.
• Option A needs a $500,000 appraisal. If the home appraises at $490,000, the higher price causes problems. See the appraisal section below.
• If your listing fee is a percentage of the price, Option A carries a slightly larger fee because the price is $10,000 higher. A flat listing fee, such as JupiDoor's packages in Utah and Idaho, is the same either way.
• In Utah, property taxes and HOA dues are prorated to the settlement deadline regardless of price (REPC § 4.1), so this choice doesn't change those lines.

Inspection objections are the most common reason sellers agree to a credit after an offer is already accepted. Under Utah's REPC, the buyer has until the Due Diligence Deadline either to cancel or to "resolve in writing with Seller any objections" (§ 8.1(b)). If they do neither, the due diligence condition is waived (§ 8.1(c)). Idaho's RE-21, as quoted in the Idaho REALTORS® Legal Hotline's 2024 answers, has the buyer give notice of disapproved items. The seller then responds in writing under Section 12(C)(3). For the Idaho timeframes, see /idaho/sell-by-owner/purchase-agreement/.

You usually have three ways to respond to a repair request: make the repair before closing, lower the price, or give a credit. The buyer's loan type affects which works best.

• FHA: HUD's handbook lists repair allowances as an inducement to purchase. The lender deducts them dollar-for-dollar from the price used to size the loan. If you're selling to an FHA buyer, a price reduction or a completed repair is usually cleaner than a cash repair allowance.
• Fannie Mae: a credit labeled for repairs still has to fit Fannie Mae's rules. It must go toward allowable closing costs and stay within the IPC limit. Otherwise it is treated as a sales concession. Have the buyer's lender confirm how it will treat the credit before you sign.
• FHA and VA appraisal repairs: the appraiser can require repairs for the loan. Utah's FHA/VA Loan Addendum makes the seller responsible for appraisal-required repairs up to a dollar cap you fill in (paragraph 4).

Whichever you choose, put it in a signed addendum before the deadline that applies. A repair promise made only by email or text can be disputed later.

Yes. Since August 17, 2024, MLSs covered by the NAR settlement can't show offers of compensation to buyer agents. NAR's consumer guide says sellers can still offer concessions. A concession listed on an MLS must be stated as a total amount and can't be conditioned on the buyer using or paying an agent. The full rules, and how to decide what to offer, are on /selling-costs/buyer-agent-commission/. This section covers only how a buyer-agent payment interacts with the concession limits above.

• FHA: in FHA INFO 2024-12, FHA said seller-paid buyer-agent commissions that follow state or local law or custom, and are reasonable in amount, are not interested party contributions. The current handbook says the same about commissions "typically paid by the seller under local or state law, or local custom."
• VA: Circular 26-24-14 says "VA does not treat the seller's payment of buyer-broker charges as a seller concession." It also lets the veteran pay their own agent in some markets, outside the loan amount.
• Fannie Mae and Freddie Mac: in April 2024 notices, both said seller-paid buyer-agent fees that follow local custom aren't counted toward the limits. Fannie Mae's guide excludes "common and customary" seller-paid fees from its limits.
• USDA: the preamble to USDA's April 2026 proposed rule says the current regulation counts real estate commission fees toward the 6% limit, and the proposed rule would exclude them. NAR reports that USDA already made that change in 2025 through its loan handbook and administrative exception authority. As of this writing, the final rule hadn't been published, so have the buyer's USDA lender confirm how it will treat a seller-paid buyer-agent fee.

In Utah, a buyer-agent payment has its own line in the REPC: the Seller's Compensation Contribution in § 4.3(e). Keep it separate from any closing cost credit so the lender can apply the right rule to each. If the buyer asks for one combined credit and plans to use part of it for their agent, have the buyer's lender confirm in writing how it will treat the money.

Federal rules (Regulation Z, 12 CFR 1026.38) say where a seller credit appears. On the buyer's Closing Disclosure, a lump-sum credit is labeled "Seller Credit" and listed with amounts paid by or on behalf of the buyer. It also appears in the Calculating Cash to Close table. On the seller's side, the same amount is labeled "Seller Credit" among the amounts due from the seller. Costs you pay for a specific item, such as the buyer's appraisal, can instead appear in the Seller-Paid column next to that charge.

• The buyer must receive their Closing Disclosure three business days before closing. CFPB tells buyers to check that the Seller Credit "reflects what you agreed upon with the seller."
• The settlement agent must give you the seller's version of the Closing Disclosure no later than the day of closing (12 CFR 1026.19(f)(4)). Title companies often provide a settlement statement as well. Check that the credit matches your contract and appears only once.
• FHA requires the lender to document all contributions on the sales contract or another legally binding document, and on the Closing Disclosure.
• Fannie Mae says loans with undisclosed IPCs are not eligible for sale to Fannie Mae. Never agree to a credit, repair payment or gift outside the contract and closing documents.

A common way to fund a credit is to raise the price by the same amount. In the example above, that's $500,000 with $10,000 back instead of $490,000 flat. It only works if the home appraises at the higher price.

• In Utah, if the REPC's Appraisal Condition is checked, the buyer can cancel and get the earnest money back if the property appraises below the purchase price. The buyer has to give notice by the Financing & Appraisal Deadline (§ 8.2).
• With an FHA or VA buyer in Utah, the state FHA/VA Loan Addendum lets the buyer out without penalty if the price exceeds the FHA appraised value or VA reasonable value (paragraph 3).
• Fannie Mae measures its limits against the lower of the price or the appraised value. A low appraisal can push a credit over the limit. VA's 4% is measured against the reasonable value from its appraisal.
• Lenders share concession terms with the appraiser. Fannie Mae tells lenders to give the appraiser all financing data and IPCs, and FHA requires a copy of any separate concession document to go to the appraiser.

If the appraisal comes in low, the usual options are lowering the price, reducing the credit, the buyer covering the gap in cash, or cancelling under the contract. Read your contract's appraisal terms before you agree to a price-up, credit-back offer. For how the Utah deadlines work, see /utah/sell-by-owner/repc-explained/.

Utah: the state-approved REPC (effective December 4, 2024) has no blank for a seller credit toward the buyer's closing costs. Its cost lines cover escrow fees (§ 4.3(a)), HOA change-of-ownership fees (§ 4.3(c)), the Seller's Compensation Contribution to the buyer's brokerage (§ 4.3(e)), title insurance (§ 6.2) and a home warranty (§ 10.1). A closing cost credit is added in one of two ways:

• FHA and VA buyers: paragraph 6 of the state-approved FHA/VA Loan Addendum. You fill in a dollar amount the seller will contribute at settlement toward rate buydowns, financing costs and prepaids/escrows. It is applied first to costs FHA or VA won't let the buyer pay. At the buyer's option, any unused portion reduces the price.
• Everyone else: an addendum, usually the state-approved blank addendum, listed in REPC Section 9. Write a dollar amount, what it may be applied to, and what happens to any amount the lender won't allow. Repair credits negotiated during due diligence go in an addendum too.

Idaho: there is no state-approved purchase contract. Most agent-assisted sales use the Idaho REALTORS® RE-21, which only REALTOR® members may use. Ask the agent preparing the offer where the credit is written and how unused amounts are handled. Idaho Code § 54-2051(4) requires an offer prepared by a licensee to include all terms and conditions the buyer or seller directs. Under Idaho's statute of frauds, an agreement to sell real property must be in writing (Idaho Code § 9-505). A concession that isn't in the signed agreement or an addendum signed by everyone isn't reliably part of the deal.

This page summarizes loan-program guides, federal disclosure rules and the Utah state-approved forms as of October 2026. It isn't legal, tax or lending advice. Loan rules change, and the buyer's lender applies them to a specific loan. Read your contract and addenda before you sign, and ask a real estate attorney, your title company or a CPA about your situation.