Q: How does Charlie calculate the maximum Seller Paid Closing Costs (SPCC) / Interested Party Contributions (IPC)?
A: Charlie determines the maximum allowable SPCC and IPC by applying the relevant agency guidelines based on loan-specific inputs such as loan type, loan-to-value (LTV) ratio, and purchase price.
FNMA / FHLMC
| LTV > 90% | 3% of purchase price or total closing costs |
| LTV 75.01–90% | 6% |
| LTV ≤ 75% | 9% |
| Investment | 2% |
FHA / USDA
| Maximum IPC is 6% of the purchase price |
VA
| Seller may pay: | 100% of the borrower’s actual origination fees, other closing costs, prepaid items, and discount points |
| Up to 4% of the sales price in seller concessions (VA funding fee, prepaid property taxes/insurance, buydowns, payoff of borrower debt) |
Was this article helpful?
That’s Great!
Thank you for your feedback
Sorry! We couldn't be helpful
Thank you for your feedback
Feedback sent
We appreciate your effort and will try to fix the article