In an FHA loan, what percentage of the purchase price can the seller contribute to the buyer's down payment?

In an FHA loan, the correct percentage that a seller can contribute to the buyer's down payment is 6% of the purchase price. This guideline allows sellers to assist buyers by contributing to closing costs or down payment, making home ownership more accessible.

A seller contribution of up to 6% can help decrease the financial burden on buyers, especially first-time purchasers who may have limited funds available for that initial payment. This policy is intended to encourage home buying by making it easier for borrowers to secure the necessary funds to close on a home.

While contributions as high as 6% are permitted, it’s important to note that contributions above this threshold may lead to complications or additional scrutiny during the loan approval process.