VA seller concessions are extra costs a seller can pay for a VA buyer, but they are capped. The simple rule is this: on a VA Loan, a seller can usually pay normal closing costs (the everyday stuff) plus up to 4% of the purchase price in concessions (the “extra help” stuff). The JD.Mortgage team at PRMG helps buyers and Realtors structure this the right way so you don’t lose a deal over a preventable math problem.

What are VA seller concessions?

A seller concession is when the seller pays for certain costs that help the buyer close. Concessions are not “cash back.” They must be tied to real, allowed expenses and shown on the closing paperwork.

On VA loans, concessions matter because there is a 4% cap on certain “extras.” At the same time, many common closing costs are not counted inside that 4% cap.

If you want the deep-dive page too, here it is: See how VA concessions work.

The two buckets that confuse everyone

Bucket 1: Normal seller-paid closing costs (usually NOT in the 4% cap)

These are the “standard” fees that show up in almost every closing. The seller can often pay these (or part of these) without it counting toward the 4% concessions cap, as long as they are reasonable and customary for the area.

Bucket 2: VA seller concessions (these ARE capped at 4%)

These are the “extra help” items. They can be incredibly useful, but they are limited to 4% of the purchase price. If you go over the cap, the lender may require changes before closing.

Important: Different lenders sometimes label and “bucket” certain items differently. The JD.Mortgage team at PRMG structures the numbers so the final closing figures fit VA rules and lender rules, without guessing.

What usually counts toward the VA 4% seller concessions cap

Think of these as costs that go beyond the basic, everyday closing fee list. Examples commonly treated as concessions include:

• Paying off buyer debts (like credit cards, car loans, or personal loans) when it is allowed and documented
• Prepaying certain items that are beyond normal allocations (case-by-case)
• Covering the VA funding fee (when applicable)
• Extra “buyer help” credits that are not tied to standard closing fees
• Temporary buydowns in many loan setups (example: a 2-1 buydown), when permitted and properly disclosed
• Lease buyouts (example: paying a documented buyout amount so a buyer can close cleanly), when allowed and tied to a real invoice or payoff

These are powerful tools, but they must be done cleanly. No vague “credits for stuff.” It has to be allowable and shown correctly.

What usually does NOT count toward the 4% cap

Many normal closing costs can be paid by the seller and are typically not considered “concessions.” Examples often include:

• Title and escrow fees (customary in your area)
• Recording fees
• Appraisal (if paid by seller, where allowed)
• Standard lender fees that are reasonable and customary

This is why two offers that both say “seller to pay $10,000” can get treated very differently. It depends on what the money is paying for.

A simple way to think about the math

Here’s the easiest way to keep it straight:

• Seller-paid closing costs = normal fees (often outside the cap)
• Seller concessions = extra buyer help (inside the 4% cap)

If you want to estimate your payment while we structure your offer, use this: Estimate your payment.

Examples: what this can look like in real life

Example 1: Strong offer with seller help, still inside the cap

A buyer uses a VA Loan. The seller pays normal closing costs (title, escrow, recording). On top of that, the seller covers a temporary buydown and a documented payoff that helps the buyer qualify. The “extra help” portion is kept under 4%.

Example 2: The cap gets blown, and the deal stalls

The contract says the seller will pay “4% concessions,” but then everyone adds extra credits on top. When the final numbers come in, it’s over the cap. Now the purchase has to be reworked late in the process.

This is where most people lose time. Not because the buyer isn’t qualified, but because the structure was sloppy.

Common mistakes that cause VA concession problems

• Using one big credit without clearly tying it to allowed costs
• Assuming “seller paid” always means “allowed”
• Waiting until the Closing Disclosure to find out you’re over the cap
• Mixing up concessions vs pricing strategies (like rate buydowns) without confirming how your lender counts them

How the JD.Mortgage team structures this so closings don’t get delayed

We do three things early:

1. We map the buyer’s goal (lower cash to close, lower payment, payoff needs, or all of the above).
2. We break costs into the right buckets so normal closing costs and concessions are clearly separated.
3. We structure the offer and lender credits so the final numbers stay compliant and realistic.

If you want to see how VA fits into your bigger plan, these help:

• Learn about VA loans
• Explore loan options

Learn More About VA Loans (Dec 15th, 2025)

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