Finance
A Pennsylvania seller who agrees to pay buyer closing costs as a seller concession is typically limited by the lender to a maximum of:
ANo limit — sellers can pay any amount
BA percentage of the purchase price based on LTV (typically 3-9% depending on down payment)✓ Correct
CExactly $5,000
D2% of the mortgage amount only
Explanation
Lenders limit seller concessions (closing cost credits) to prevent inflated purchase prices. For conventional loans, seller concessions are limited to 3% (LTV >90%), 6% (75-90% LTV), or 9% (LTV <75%) of the purchase price. FHA limits seller concessions to 6%. Excessive concessions can affect the appraisal.
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