When a loan officer and the agency guidance disagree about what counts inside the concession cap
A contract at 425,000 with a 2.5 percent buyer-agent fee and a 3 percent seller-paid cost concession looks straightforward until two things surface that change the numbers. First, a loan officer may say that at a given down payment tier the interested-party contribution cap is 3 percent and that the buyer-broker fee counts inside that cap, which would mean the fee plus prepaids exceeds the limit. The general reading of agency guidance issued after the recent commission rule changes is that seller-paid buyer-agent compensation is typically excluded from the IPC limit, which would leave the full concession available for costs. A lender citing an investor overlay on top of that guidance should be asked to produce it in writing, since an overlay that cannot be produced quickly is often not really there. Second, if the appraisal comes in below contract price and the cap is measured against the lesser of price or appraised value, the dollar amount of the concession shrinks, and any numbers built against the higher contract price need to be rebuilt against the lower base. When the numbers do not reconcile, the fallback is usually to reduce the purchase price, drop the concession, and have the buyer pay the agent fee directly at closing, which lowers the loan amount and the monthly payment but can leave reserves thin. On a deal like this, the real question is rarely whether a couple thousand dollars is at stake. It is whether the file closes at all.
