Two numbers decide it: the cap your loan program sets, and the actual closing costs you have to cover. On a conventional loan the cap is 3 percent of the price with less than 10 percent down, 6 percent between 10 and 25 percent down, and 9 percent above that, and FHA stops at 6 percent.
Buyers usually ask us this question the wrong way around. They want to know the biggest number they are allowed to ask for, when the number that matters is the smaller of the two ceilings above them. If your loan caps contributions at 3 percent of a $464,000 house, that is $13,920. If your actual closing costs, prepaid taxes and insurance and the first year of escrow only add up to $9,000, then $9,000 is your real limit, because a seller credit cannot turn into cash at the table.
The second thing to know is that a credit is a negotiation, not a right. Nothing in the North Carolina Offer to Purchase and Contract entitles you to one. What has changed is the odds, and in New Hanover County this fall the odds are better than they were in the spring.
What does my loan program allow?
For conventional financing, Fannie Mae’s Selling Guide topic on interested party contributions, dated May 7, 2025, sets the limits by occupancy and loan-to-value: 3 percent when the loan-to-value is above 90 percent, 6 percent from 75.01 to 90 percent, 9 percent at 75 percent or less, and 2 percent on an investment property at any loan-to-value. The percentage is calculated on the lower of the sales price or the appraised value, which matters more than it sounds like it should.
On FHA, the FHA Single Family Housing Policy Handbook 4000.1, which we read on October 31, 2026, puts it in the negative: contributions “exceeding 6 percent are considered an inducement to purchase,” and an inducement reduces the price the loan is calculated on, dollar for dollar. The handbook is also explicit that interested party contributions cannot be used for the borrower’s minimum required investment, which is the down payment.
VA is the one where we will not hand you a number. The limit on a VA loan is written against the appraised value rather than the price, several lenders apply their own stricter overlays, and the figure is reported inconsistently on the pages that come up first in a search. If you are using your VA entitlement, make your loan officer put the allowable concession in writing on your pre-approval before you write the offer. We would rather you have that one sentence from the lender than a percentage from us.
- On a $464,000 purchase, the conventional caps work out to $13,920 at 3 percent, $27,840 at 6 percent and $41,760 at 9 percent Fannie Mae Selling Guide B3-4.1-02, May 7, 2025, our calculation
- New Hanover County: median sale price $464,000, 61 days on market against 34 a year ago, 1,251 active listings, and two of every five of them have already taken a price cut Redfin county data, three months ending September 2026, via our New Hanover market update
- Brunswick County: 93 days on market against 64 a year ago, 2,334 active listings, about 38 percent with a price cut Redfin county data, three months ending September 2026, via our Brunswick market update
- Pender County: 430 active listings, down from 439, and listings with a price cut down about 19 percent Redfin county data, three months ending September 2026, via our Pender market update
Will a Wilmington seller actually say yes?
More often than a year ago, and it depends which county you are in. In New Hanover the typical home now takes 61 days to go under contract against 34 a year ago, there are 1,251 homes on the market, and two of every five have already cut the price. A seller who has watched the calendar run past 60 days and has already dropped the price once will usually rather write you a $10,000 credit than cut again, because the credit does not reset the price history that every other buyer is looking at.
Brunswick is softer still, with 93 days on market and 2,334 active listings, and in Leland you are also competing with builders who are buying rates down. Our mortgage update has this month’s builder terms, and a resale seller in the same price band has to answer them with something.
Pender is the exception and the place to be careful. Active listings there slipped to 430 and the number of listings with a price cut is down about 19 percent, the only county in the region where both moved the seller’s way. In Hampstead and Surf City we ask for a credit differently: smaller, specific and tied to something the inspection found, rather than a round number attached to nothing.
Is a credit better than a lower price?
It depends on which problem you have. Take the $13,920 that 3 percent buys on a $464,000 house. Used as a price cut, it drops the loan by about $11,136 with 20 percent down and the payment by about $76 a month at the 7.24 percent 30-year average Freddie Mac published for the week ending October 29, 2026. Used as a credit, it pays your closing costs now and leaves the $13,920 in your bank account on move-in day.
The third use is usually the strongest at today’s rates. Put part of that credit into a permanent rate buydown rather than into escrow. On a $371,200 loan, if two points cost $7,424 and buy half a point of rate, which varies by lender and by week, the payment falls from about $2,530 to about $2,405, a saving of roughly $125 a month that pays the points back in about five years. Ask your lender to price the credit three ways on the same sheet: toward costs, toward a permanent buydown, and toward a temporary 2-1 buydown. Our post on points against a rate buydown walks through that comparison, and what closing costs actually run here will tell you how much of the credit you can even use.
A credit almost always arrives attached to a price. If a seller agrees to $464,000 with a $13,920 credit rather than $450,080 with none, the house still has to appraise at $464,000, and in a market where two of five listings have cut the price, appraisers are looking at those cuts too. We have seen a credit evaporate at the appraisal and the buyer end up with neither the money nor the lower price. The other trap is the cap moving under you. If you planned on 12 percent down and 6 percent of credit, then your lender reworks the file at 8 percent down, the cap drops to 3 percent and part of the credit you negotiated becomes unusable. Lock the down payment and the cap before you ask, not after.
Related questions people also ask
Can a seller credit be used for my down payment?
No. On an FHA loan the handbook is explicit that interested party contributions may not be used for the borrower’s minimum required investment, and conventional financing concessions work the same way: they can pay closing costs, prepaid items, discount points and in some cases a temporary buydown, but not the down payment itself. The down payment has to be your own funds or a documented gift. That is why a buyer who is short on cash should ask a lender to restructure the loan rather than ask the seller for more.
Can I get cash back at closing from a seller credit?
No, and asking for it is how a clean deal turns into a problem. A credit can only be applied to costs you actually owe at closing, so if the credit is larger than those costs, the extra is either reduced on the settlement statement or returned to the seller. The practical answer is to ask your lender for a cost estimate first and then negotiate a credit that fits it, which also makes your offer easier for a listing agent to say yes to.
Do sellers prefer a price cut or a closing cost credit?
Many sellers prefer the credit, because the recorded sale price supports the value of the next house in the neighborhood and does not advertise a second price reduction to buyers who are still watching. For the seller the cash cost is the same either way, so the choice is mostly about optics and about their own net proceeds sheet. That is exactly why a credit is often easier to get than the equivalent reduction in price.
Before you write an offer, ask your loan officer for one page with three numbers on it: your contribution cap at the down payment you are actually using, your estimated closing costs and prepaids, and what the same money would do as a permanent buydown. Bring that page to us and we will build the ask around it, which is part of how our Buyer Advantage Program works. We are glad to talk through a specific house and a specific lender sheet with you.
Sources: Fannie Mae Selling Guide, B3-4.1-02 Interested Party Contributions, topic dated May 7, 2025, read October 31, 2026; FHA Single Family Housing Policy Handbook 4000.1, Interested Party Contributions, read October 31, 2026; Freddie Mac Primary Mortgage Market Survey, week ending October 29, 2026; Redfin county data for New Hanover, Brunswick and Pender counties, three months ending September 2026, via our county market updates; builder incentive terms as of October 17, 2026, via our mortgage update; payment and cap figures our calculation.
