Florida FHA Seller Credits: 6% Limit and Closing Costs

For an FHA purchase in Florida, the seller and other interested parties may pay up to 6% of the sales price for certain buyer costs.

This credit may help pay closing costs, prepaid items, discount points, and approved rate buydowns. But 6% is only one limit. The credit cannot be more than the buyer’s actual eligible costs.

It also cannot replace the buyer’s required minimum investment.

For a $350,000 purchase, 6% equals $21,000. If the buyer has only $13,750 in eligible costs, the buyer may not use the full $21,000.

What is the FHA seller-credit limit?

HUD calls these payments Interested Party Contributions, or IPCs. Interested parties can include the seller, builder, developer, real estate agent, or another party with a financial interest in the sale.

Under the current HUD Handbook 4000.1 Update 18, issued August 12, 2026, interested parties may pay up to 6% of the sales price for listed borrower costs.

The 6% limit includes some closing costs and prepaid items. It also includes discount points, rate buydowns, payment supplements, some mortgage-interest payments, mortgage-payment protection insurance, and the upfront mortgage insurance premium.

FHA rules also say IPCs cannot pay the borrower’s minimum required investment. For many FHA borrowers, this investment is 3.5% of the adjusted value. The exact amount and source rules depend on the transaction.

What can the credit help pay?

The lender and closing agent must review each charge. The contract amount alone does not decide if a cost is eligible.

• Origination fees and other loan charges
• Appraisal, credit report, title, settlement, or recording charges when they are buyer costs
• Prepaid interest from closing through the end of the month
• Required homeowners insurance paid in advance
• Initial escrow deposits for taxes and insurance, when allowed
• Discount points
• An approved temporary or permanent rate buydown

For more on prepaid interest, read Prepaid Per Diem Interest at a Florida Mortgage Closing. For points, see Mortgage Discount Points vs. a Higher Rate in Florida.

Why a credit below 6% can still be too high

A seller credit is not cash back. It must pay allowed costs.

For example, a $350,000 purchase has a 6% limit of $21,000. If the contract gives the buyer an $18,000 credit but final eligible costs are only $13,750, the buyer may not use the remaining $4,250.

The parties may need to change the agreement or use another allowed structure. The lender and closing agent should review this before they prepare the Closing Disclosure.

Under FHA guidance, IPCs above the 6% limit or actual eligible costs may be an inducement to purchase. This can affect the value used for loan-to-value calculations. It may also change the cash needed to close.

Florida costs that need a closer look

Florida closing costs vary by county, property, insurance needs, contract terms, and local practice. A seller’s payment is not always an FHA IPC or an eligible buyer cost.

Documentary stamp tax

Florida charges documentary stamp tax on documents that transfer an interest in real property. In most Florida counties, the rate is 70 cents per $100, or part of $100, of consideration. Miami-Dade has different rules.

The Florida Department of Revenue says all parties to the document are liable for the tax. This is true even if the contract says one party will pay it. Do not automatically count a seller-paid tax as a buyer FHA credit.

The lender and closing agent should confirm how to treat it.

Recording, title, insurance, and condo costs

Recording fees and title charges may go to the buyer, seller, or both. The contract and local practice matter.

Wind or flood coverage may be required for a property. Condo transactions may have application fees, transfer charges, assessments, or reserve-related costs. Do not assume an FHA seller credit can pay every charge.

Seller credits are not lender credits or gifts

• Seller credit: Money the seller gives for allowed buyer costs. FHA’s IPC limit may apply.
• Lender credit: Money from the lender that helps pay closing costs. It may come with a higher interest rate and has separate rules.
• Gift funds: Money from an eligible donor. Proper documentation is required. A seller concession is not a gift.
• Rate buydown: Funds that lower the rate or payment under an approved structure. A seller-paid buydown is part of the FHA IPC limit.

Learn more about gifts in FHA Gift Funds for Down Payment and Closing Costs in Florida.

How to document the credit

Put the seller contribution in the purchase contract or another legally binding agreement. State a dollar amount or a clear maximum.

For example: “Seller shall contribute up to $10,000 toward buyer’s allowable closing costs, prepaid items, discount points, and permitted buydown costs.”

Send every signed addendum to the lender. HUD requires the contribution in the sales contract or another binding document. It must also be in the FHA underwriting file and the Closing Disclosure or similar closing document.

If you use a separate binding agreement, give it to the appraiser as required.

How seller credits appear on the Loan Estimate and Closing Disclosure

The CFPB Loan Estimate shows seller credits in the estimated cash-to-close calculation. The credit lowers the amount the buyer is expected to bring to closing.

On the Closing Disclosure, a general seller credit may appear in the cash-to-close and transaction summary areas. A payment for a specific fee may appear as a seller-paid line item.

Check that the final credit matches the signed agreement. CFPB rules require additional disclosure if the final seller credit differs from the Loan Estimate amount. Rounding differences are excepted.

See Regulation Z section 1026.38.

Before making an FHA offer in Florida

1. Ask the lender for a current cash-to-close estimate.
2. Confirm the buyer’s required minimum investment.
3. Estimate prepaids, insurance, points, and buydown costs.
4. Keep the requested credit within the 6% FHA limit.
5. Keep the request tied to actual eligible costs.
6. Use clear contract wording.
7. Send all addenda to the lender.
8. Review the Loan Estimate and Closing Disclosure before closing.

For another FHA contract requirement, read The FHA Amendatory Clause in Florida. It is separate from seller-credit rules.

Frequently asked questions

Can a Florida seller pay all FHA closing costs?

Possibly. The seller may pay up to 6% of the sales price for eligible costs. The credit cannot be more than the buyer’s actual eligible costs.

The buyer must still meet FHA’s minimum required investment with allowed funds.

Can an FHA seller credit pay for a temporary rate buydown?

Yes, if the buydown is allowed, properly set up, and documented. The amount counts toward the FHA IPC limit.

Can a seller credit pay for a Florida condo fee or assessment?

Do not assume it can. The lender and closing agent must decide if the charge is an eligible buyer cost under current FHA guidance and the facts of the transaction.

Does a seller-paid real estate agent fee count toward the FHA 6% limit?

HUD says reasonable real estate agent commissions or fees usually paid by the seller under state or local law, or local custom, are not IPCs. The closing team should confirm treatment for the specific transaction.

Official resources

• HUD FHA Single Family Housing Policy Handbook 4000.1
• HUD Handbook 4000.1 Update 18
• CFPB Loan Estimate explainer
• CFPB Closing Disclosure explainer
• CFPB Regulation Z section 1026.38
• Florida Department of Revenue documentary stamp tax guidance

Compliance note: This article is for education only. FHA rules, closing costs, insurance needs, contract terms, and lender requirements can vary. All loans are subject to underwriting and credit approval. This is not a commitment to lend.