Yes, up to a cap. FHA allows 6 percent of the sales price, a conventional loan with less than 10 percent down allows 3 percent, and VA lets the seller pay all your closing costs. Never the down payment. One move worth knowing: when cash to close is the tight number, ask for a credit, not a price cut.
Why a credit beats a price cut
A price cut shrinks the loan. A credit shrinks the cash you bring. Say a $400,000 Arizona home, family of three, 3.5 percent down on FHA, $10,000 of closing costs and prepaids, all figures illustrative. Cash to close is $24,000. The seller offers $10,000. As a price cut, the loan is $9,650 smaller, about $61 a month at 6.5 percent, and cash to close is still $23,650. As a credit, the payment doesn’t move and cash to close drops to $14,000. For a household like this, that $10,000 is the difference between closing and not.
The credit has to fit. On FHA the 6 percent also holds any rate buydown and the upfront mortgage insurance. Anything above what you actually owe at closing comes off the price dollar for dollar before the loan is sized. So size the ask to the Loan Estimate, not a round number. The sections are public: 4000.1, B3-4.1-02, M26-7 chapter 8.
Where the answer flips
If the cash is already there and the payment is the tight number, the price cut wins: a smaller loan for as long as you hold it. On VA, seller-paid closing costs and normal points sit outside the four percent limit; prepaid taxes and insurance and the funding fee sit inside it. The down payment is a separate pile. On FHA it can’t come from the seller or anyone paid by the sale; a family gift can, and Arizona has programs that can cover most of it. Ask which you qualify for.
Bring the Loan Estimate and the listing and I’ll run both versions side by side. Ten minutes, no application, no credit pull.