Fannie Mae/Freddie Mac Federal Guidelines - 2% Credit Limitation

[Jack Macioce]

I am in the process of closing a deal using a 30-year conventional mortgage.  We acquiring the property with tenants.  I was told by our lender that there is a 2% cap on credits the seller's can offer.  When I say credits, specifically for this deal, I told our closing agent to include the pro rated rents due to us and the security deposits on the closing disclosure.  Since the sum of the rents and security deposits exceed 2% of the sales price, they have to remove a security deposit and have the seller write a personal check to us.

I don't have a problem with this scenario, but wanted to know if this was actually a rule.  Also, going forward, should I just handle the rents and security deposits outside of the closing disclosure?