Buying in Harrison City and worried about closing costs eating into your budget? You are not alone. Many Penn Township buyers use “seller assist” to reduce cash to close without derailing a solid offer. In this guide, you will learn what seller assist is, how much you can use with different loans, local transfer taxes to plan for, and the exact steps to structure your offer. Let’s dive in.
What seller assist means
Seller assist, also called seller concessions or seller credits, is when the seller agrees to pay part of your closing costs, prepaids, or discount points at settlement. The credit appears on your Loan Estimate and Closing Disclosure, which reduces your cash needed at the closing table.
Lenders allow seller assist within specific program limits and will verify that the credit is disclosed, documented, and used for approved items. If the credit is too large, the lender may reduce what they will finance or require a price change. The official rules are set in each loan program’s guidance, including the Fannie Mae Selling Guide on interested party contributions. You can review those rules in the Fannie Mae guide on interested party contributions for conventional loans: Fannie Mae Selling Guide, IPCs.
How much seller assist you can use
Conventional loan limits
Conventional loans cap “interested party contributions” by your down payment:
- Less than 10% down: up to 3% of the price or appraised value, whichever is less.
- 10% to 25% down: up to 6%.
- 25% or more down: up to 9%.
- Investment properties: typically up to 2%.
See the official rules in the Fannie Mae guide on IPCs. Your lender may add stricter limits.
FHA loan limits
FHA generally allows seller contributions up to 6% of the sales price or appraised value, whichever is less. FHA counts amounts above that as an “inducement to purchase,” which can reduce the value used for underwriting. Review details in the FHA Handbook summary.
VA loan limits
VA has a common 4% cap on certain concessions. Normal buyer closing costs and customary discount points are treated differently and may not count toward the 4% total. Because interpretations vary, confirm with your VA lender. You can read the policy in the VA Lender’s Handbook: VA Lender’s Handbook (Chapter 8).
Harrison City closing costs to know
Pennsylvania transfer taxes
Pennsylvania charges a 1% state realty transfer tax. Many localities add municipal and school transfer taxes. Combined state and local transfer taxes often total around 2% in many PA communities. See an overview on the county’s page about transfer taxes: Realty Transfer Taxes overview.
Penn Township’s share
Penn Township lists a municipal realty transfer tax of 0.5%. That means a Harrison City purchase typically includes the 1% state tax plus the 0.5% township share, and any school district share that applies. Always confirm the final total for a specific address. See the township reference here: Penn Township tax page.
Recording and settlement
Recording fees and transfer taxes are collected at settlement. In Westmoreland County, the Recorder of Deeds manages recording and fee collection. These line items appear on your Closing Disclosure. Review the county’s fee schedule here: Westmoreland County fee schedule.
How to structure your offer
Use this checklist to keep your offer lender-ready and clear for the seller.
- Get prequalified and clear program limits upfront
- Tell your lender you plan to request seller assist. Ask them to confirm the maximum credit and which items count toward the cap for your loan. See the conventional rules in the Fannie Mae IPCs guide and FHA rules in the FHA Handbook summary.
- Put precise language in your offer
- Be specific about amount and use. Example: “Seller to credit Buyer up to $7,500 at settlement toward Buyer’s closing costs, prepaids, and lender-approved discount points, subject to lender program limits.” The credit must appear on your final settlement documents and Closing Disclosure.
- Verify what counts toward the cap
- Ask your lender whether discount points, escrow deposits, upfront mortgage insurance, or the VA funding fee apply to your cap.
- Price carefully to avoid appraisal issues
- If you raise the price to cover your credit, the appraisal must support the higher price. FHA warns that excessive or unsupported concessions can be treated as inducements and reduce the value used for underwriting. See this overview on seller contributions and inducements.
- Review disclosures and timing
- Under TRID, you must receive your Closing Disclosure at least three business days before closing. It will show the seller credit and all fees. Learn more about TRID timing here: CFPB’s integrated disclosure rules summary.
- Confirm local taxes and fees
- Ask your title or settlement company for firm estimates of recording fees and transfer taxes in Penn Township and Westmoreland County so you know exactly how the credit reduces your cash to close. Use the township tax page and county fee schedule as references.
Appraisals, underwriting, and pricing
Seller assist must fit both program rules and your property’s appraised value. If the agreed credit exceeds the program cap, your lender can require a lower credit or a price change. If the price was increased to cover concessions and the appraisal does not support it, you may need to renegotiate or adjust financing. The FHA guidance on inducements and the Fannie Mae rules on IPCs highlight these risks.
Smart ways to use seller credits
- Buy down your interest rate with discount points if it fits your time horizon.
- Cover lender and title fees to reduce out-of-pocket costs.
- Pay prepaids like property tax and insurance escrows at closing.
- On FHA, confirm how upfront mortgage insurance is treated in your cap using the FHA Handbook summary.
Common pitfalls to avoid
- You cannot use seller assist for your minimum down payment. Program rules prohibit seller-funded down payments. See this FHA overview: Can sellers pay the buyer’s down payment?
- Unused credits do not come back to you as cash. Any unused portion typically reverts to the seller at closing. Learn more here: What happens to unused seller credits.
- Lender overlays can be stricter than program rules. Build “subject to lender approval” language into your offer if advised by your agent and lender.
Ready to buy in Harrison City?
Seller assist can be a smart tool when you match it with the right loan, price, and local tax picture. If you want help crafting a strong offer in Penn Township, you can lean on local guidance, clear contract language, and a lender-ready plan. For one-on-one advice and a tailored strategy, connect with Katrina Siffrinn.
FAQs
What is seller assist on a Pennsylvania home purchase?
- Seller assist is when the seller pays a portion of your closing costs, prepaids, or discount points at settlement within your loan program’s limits.
How much seller assist can I get with a conventional loan?
- Conventional loans cap credits based on down payment, typically 3%, 6%, or 9% for primary residences, with investment properties around 2% per Fannie Mae’s IPC rules.
Can I use seller assist for my down payment in Harrison City?
- No, seller concessions cannot fund your minimum down payment; they are for closing costs, prepaids, and discount points.
Who pays transfer taxes in Penn Township, and can seller assist cover them?
- Pennsylvania has a 1% state transfer tax plus local shares; buyers and sellers often negotiate the split, and seller credits can offset your share if your lender allows.
What happens if the appraisal does not support a price increased to cover credits?
- You may need to reduce the credit, adjust the price, or change financing because lenders base approvals on the lower of the purchase price or appraised value.
