Nationwide Mortgage Licensing System (NMLS) Practice Exam

What is the maximum allowable amount of VA seller concessions?

1. 2%

2. 3%

3. 4%

4. 5%

The correct answer is: 4%

The maximum allowable amount of VA seller concessions is indeed 4%. Seller concessions refer to the financial contributions that a seller can provide to the buyer to assist in closing costs or other expenses related to a home purchase. In the context of a VA loan, these concessions can cover various fees, such as closing costs, loan origination fees, and even some prepaid costs related to property taxes and insurance. Understanding this guideline is essential because it helps ensure that veterans and eligible service members receive sufficient financial support when purchasing a home. By allowing seller concessions up to 4%, the VA aims to make home ownership more accessible while maintaining the integrity of the mortgage process. It is also important to recognize that while sellers can assist buyers up to this limit, the actual amount can vary based on negotiations between the buyer and seller. The other amounts presented do not align with the VA's established policy on maximum concessions. Therefore, understanding the 4% limit allows buyers and mortgage professionals to navigate the financing process more effectively, maximizing benefits available through VA loans.