Buyer & Seller Credits
Nation's #1 Redfin Team
A Guide to Interested Party Contributions (IPC's).
Interested Party Contributions (IPCs)
Interested Party Contributions are closing cost concessions paid by someone with a financial interest in the transaction, such as the seller, builder, or real estate agent.
What are IPCs?
IPCs are financing or sales concessions that help pay a buyer's eligible closing costs. They cannot be used for the borrower's down payment, required reserves, or minimum contribution.
Key Rule
The amount allowed depends on the loan-to-value (LTV) ratio and occupancy type under Fannie Mae and Freddie Mac guidelines.
Interested Parties
- Seller
- Builder or Developer
- Real Estate Agent
- Real Estate Broker
- Affiliates benefiting from the sale
Not Considered Interested Parties*
- Lender
- Mortgage Broker
- Borrower's Employer
Maximum IPC Limits
| Occupancy | LTV | Maximum IPC |
|---|---|---|
| Primary Residence Second Home | Over 90% | 3% |
| 75.01% – 90% | 6% | |
| 75% or Less | 9% | |
| Investment Property | All LTVs | 2% |
What Counts as an IPC?
Restrictions
- Down Payment
- Required Cash Reserves
- Minimum Borrower Contribution
Quick Examples
95% LTV Purchase
Purchase Price: $320,000
Seller Contribution: $9,000
Maximum Allowed: $9,600
Within the 3% limit.
92% LTV Purchase
Purchase Price: $400,000
Agent Contribution: $15,000
Exceeds the 3% conventional limit.
Temporary Rate Buydown
If funded by the seller or another interested party, the buydown cost must be included when calculating total IPCs.
Conventional Financing Guide
Interested Party Contributions
Seller credits can help reduce a buyer’s closing costs, but conventional financing limits how much an interested party may contribute.
Interested Party Contributions, commonly called IPCs, are funds provided by a person or organization with a financial interest in the transaction. Fannie Mae and Freddie Mac generally cap these concessions according to the buyer’s down payment.
View Contribution Limits ↓What Is an IPC?
A contribution from someone with a financial stake in the sale.
IPCs are funds or concessions provided by an interested party and applied toward eligible buyer closing costs.
These contributions may help reduce the amount a buyer must pay at closing, but they are subject to program limits and restrictions.
Who May Be Considered an Interested Party?
People and entities connected to the transaction.
Sellers
The property seller may offer concessions toward eligible buyer closing costs.
Builders & Developers
Builders and developers may offer incentives or credits connected to the sale of the property.
Agents & Brokers
Real estate agents and brokers may be treated as interested parties when they provide transaction-related funds.
Affiliates
Affiliates or related entities tied to the seller, builder, or agent may also be treated as interested parties.
Third-Party Organizations
A nonprofit or other group may be treated as an interested party when funds are directed through it by someone with a financial interest in the transaction.
Conventional Concession Limits
Select the buyer’s down payment range.
Maximum Contribution
3%of the applicable transaction amountBuyer Down Payment
Less than 10%
When the buyer’s down payment is below 10%, the maximum interested party contribution is generally 3%.
A smaller down payment generally results in a lower maximum concession percentage.
Maximum Contribution
6%of the applicable transaction amountBuyer Down Payment
From 10% through 25%
When the buyer’s down payment falls within this range, the maximum interested party contribution is generally 6%.
A moderate down payment may allow a higher concession limit than a transaction with less than 10% down.
Maximum Contribution
9%of the applicable transaction amountBuyer Down Payment
Greater than 25%
When the buyer’s down payment exceeds 25%, the maximum interested party contribution is generally 9%.
A larger down payment generally supports the highest conventional concession limit shown in this guide.
Quick Reference
Down payment and maximum concession.
Key Restrictions
What IPCs cannot fund.
Down Payment
IPCs cannot be used to provide the borrower’s required down payment.
Financial Reserves
IPCs cannot be used to satisfy required borrower reserve funds.
Minimum Contribution
IPCs cannot replace the borrower’s required minimum financial contribution.
Common Eligible Uses
Contributions may help with eligible closing expenses.
Closing Costs
Eligible lender, title, settlement, and transaction charges may be covered within program limits.
Prepaid Expenses
Certain prepaid items may be eligible when permitted by the loan program and lender.
Discount Points
Contributions may sometimes be applied toward eligible discount points or permitted financing costs.
Frequently Asked Questions
Interested party contribution questions.
What is an interested party contribution?
It is a contribution from a person or entity with a financial interest in the real estate transaction, used toward eligible buyer closing costs.
Can the seller pay the buyer’s down payment?
No. Interested party contributions cannot be used to provide the borrower’s required down payment.
Why does the maximum change with the down payment?
Conventional financing generally allows a larger contribution percentage when the borrower makes a larger down payment.
Can an agent contribute toward closing costs?
Real estate agents and brokers may be treated as interested parties when they provide transaction-related funds, so the contribution may be subject to applicable IPC limits.
Who confirms the final allowable amount?
The lender and underwriting team should confirm the allowable amount, eligible uses, documentation, and treatment under the applicable loan program.
This information is provided for general educational purposes only and does not constitute mortgage, underwriting, legal, tax, or financial advice. Interested party contribution limits and permitted uses may depend on occupancy, property type, loan-to-value ratio, transaction structure, lender overlays, and current Fannie Mae or Freddie Mac requirements. Confirm the applicable rules with a licensed mortgage professional and the current agency guidelines before relying on these figures.
Our stats
Experience Matters
The Nation's
#1
Redfin Team
Top
Real Estate
Brokerage Nationally
Premier
Presidents
Club
Real Estate Brokerage
Operational Volume
Based on recent reports, Redfin operates with a substantial real estate transaction volume:
Recent Trends
58.9 Million
visits in Feb 2026
Redfin.com
93.2 million
monthly visitors
Total
1
Billion
Sales
Let’s Build Your Next Move
Schedule a Call
Not sure if now’s the right time to buy or sell? Looking to connect with a Redfin Premier Agent? We’d love to get to know more about you and your needs! Feel free to use any of the options here to get in touch with us.