Michigan first-time buyer guide
Seller Concessions and Closing Costs in Michigan
See how seller-paid closing costs can affect cash to close, offer structure, appraisal and mortgage-program limits.
A concession is part of the transaction
A seller may agree to pay certain allowable buyer costs. The purchase agreement should state the amount or method clearly, and the loan program limits what can be paid.
Credits cannot always become cash
If allowable costs are lower than the negotiated credit, the unused amount may not be paid to the buyer. Estimate costs before writing the offer and update the figures when the Loan Estimate arrives.
Consider price and appraisal together
Increasing the price to create room for a concession changes the loan and may depend on the property's appraised value. Compare the resulting payment and cash to close instead of treating the credit as free money.
Seller credit versus lender credit
A lender credit may reduce upfront costs in exchange for different pricing, often a higher rate. Compare both choices over the expected time in the loan.
Questions to take to your loan review
- What is the estimated total monthly payment?
- How much cash is needed before and at closing?
- What assumptions could change for this borrower or property?
- How much savings remains after closing?
Calculate the usable credit
Estimate allowable closing costs and prepaid items before requesting a credit. A credit larger than permitted or larger than eligible costs may not produce extra cash for the buyer. Compare an offer with a concession against an offer with a lower price. If the price is increased to support a credit, confirm the payment and appraisal implications.
Common questions
Can the seller pay the down payment?
Seller concessions generally apply to allowable closing costs rather than the borrower’s required down payment.
What happens to an unused credit?
It may be reduced or lost, depending on the contract and program; it usually does not become cash to the buyer.
Is a lender credit the same thing?
No. A lender credit comes from loan pricing and may involve a different interest rate or cost structure.
Official sources
Sources reviewed September 3, 2026.
Reviewed by Mike Alkema
Mike Alkema, NMLS #642953, is a licensed mortgage loan originator with Leeward Point Mortgage LLC, NMLS #1823590. He reviewed this guide for practical mortgage context and advertising clarity. Updated September 3, 2026. Program rules and availability can change; confirm current requirements for your household and property.
Compare your Michigan home-buying options
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