Which loan type has the highest allowable seller-paid closing costs?

The loan type that has the highest allowable seller-paid closing costs is VA loans.

VA loans, which are guaranteed by the Department of Veterans Affairs, allow for a high level of seller concessions. Sellers may cover up to 4% of the purchase price in closing costs for the buyer, which can include various expenses such as appraisal fees, title insurance, and property taxes. This high percentage is designed to assist veterans and service members in making homeownership more accessible.

It's important to note that while conventional loans, FHA loans, and USDA loans do allow for seller contributions to closing costs, the limits are generally lower than those set for VA loans. This distinction makes VA loans particularly beneficial for eligible borrowers seeking financial support for closing expenses.