Why Sellers Are Helping Buyers with Down Payments

A recent Freddie Mac survey found that 16 percent of buyers took down payment help from their home’s seller.

While this may seem like a surprising source for down payment assistance, the percentage of people using it has been steady for several years, according to MarketWatch. They can be helpful to both parties: They give cash-strapped buyers an additional option, and help sellers reach a deal more quickly.

Also important to note: mortgage underwriting rules are clear on the difference between what’s known as a “seller concession” – a credit at closing, that may increase the cost of the home, like Centrella’s client took – and a “seller contribution,” which is an amount deducted from the sale price. Contributions are used “almost never,” according to Tompkins.

Read more