FHA plans to reduce allowable seller concessions from 6% to 3%. The current 6% level exposes FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions. This change will be posted in the Federal Register (As of June 2010, there has been no official Federal Register announcement), and after a notice and comment period, would go into effect in the early summer. To view a copy of this announcement, click here.
