Seller contribution comparison

Assumptions and limits

Eligibility is lender review required. This draft does not apply contribution caps, test inducements, or decide program compliance.

Guideline pages were reviewed November 5, 2026. This draft is not a loan estimate, approval, or offer to lend. Sample mode is on, so the figures on screen are fictional.

Permanent quote date: March 12, 2026 (fictional).

Dated illustrative averages

Mortgage News Daily 30-year fixed national average, saved November 5, 2026: Conventional 7.17%, FHA 6.80%, VA 6.82%. Not a live rate and not a lender quote. They can fill the original note rate and are not used as the permanent buydown rate or cost. Rate page · Methodology

Quote-only items

• Permanent rate, dollar cost, and quote date come only from what you type.
• Upfront fee and monthly mortgage insurance come only from what you type.
• Tax, insurance, and HOA come only from what you type and stay constant.
• The address is a label. Nothing is looked up from it.

How the estimated APR is calculated

This is a worksheet estimate for a fixed-rate, fully amortizing monthly mortgage. It is not a Loan Estimate APR, not a closing disclosure, and not a lender certification.

• Finance charge, 12 CFR 1026.4(a): a buyer-paid charge imposed by the creditor as an incident to the credit. Interest is included. The estimate adds only the buyer fees you enter: origination, underwriting, processing, other lender or broker fees, buyer discount points on the contract rate, prepaid interest, and any additional amount you explicitly include.
• Seller's points, 12 CFR 1026.4(c)(5) and comments 4(c)(5)-1 and 4(c)(5)-2: charges the creditor imposes on a noncreditor seller, and other finance charges a seller pays, are excluded when the buyer is not legally bound to the creditor for that charge. The permanent buydown dollars and the temporary subsidy are excluded on that basis. Buyer's points are included. If the buyer is actually obligated for a seller-paid charge, this estimate is wrong.
• Third-party buydowns, comment 17(c)(1)-3 to 12 CFR 1026.17: if the subsidy is outside the credit contract and the buyer is bound to the note rate from the start, the APR does not reflect the buydown. This worksheet treats the 1-0 and 2-1 plans that way, so the estimated APR uses the contract note-rate payment, not the subsidized payment. A buydown written into the note would be a composite rate and is not calculated here.
• Amount financed, 12 CFR 1026.18(b): note amount minus prepaid finance charges. A financed finance charge stays in the note, the payment is calculated on that note, and the charge is still subtracted. A cash finance charge is subtracted and is not added to the note.
• Mortgage insurance, 12 CFR 1026.4(b)(5) and comment 4(b)(5)-1: a premium for insurance or a guarantee protecting the creditor is a finance charge only for the period the creditor requires it. The monthly amount in the illustrated payment is the figure you entered, held constant. Estimated APR uses only the months you enter. The sample uses 120 months as an editable estimate, not a lender confirmation and not an FHA or VA rule. If the monthly amount is above zero and the months are blank, the estimate is unavailable.
• An upfront guarantee or mortgage-insurance premium the buyer pays is ordinarily in 12 CFR 1026.4(b)(5). The HOEPA points-and-fees exclusion in 12 CFR 1026.32 is a different test and is not used here. When the upfront amount is above zero, you still choose include or exclude, because the field can hold a charge you do not treat as a finance charge.
• Real-estate charges in 12 CFR 1026.4(c)(7), including title, appraisal, notary, credit report, and document preparation, are not added automatically. Taxes, homeowners insurance, HOA dues, and ordinary escrow deposits are not added. Comment 4(c)(7)-3 limits that real-estate exclusion to charges for the initial credit decision.
• Appendix J actuarial method: the nominal APR is the monthly unit-period rate times 12. The last principal-and-interest installment is adjusted so the note principal is repaid; the payment shown on the comparison is still the level payment. Prepaid interest uses the day count you select and is not an Appendix J odd-days fraction. Odd first-period days, if you enter them, use a 30-day month and earn that fraction of the monthly rate. Leaving them blank assumes one full month to the first payment.

12 CFR 1026.4 · Official interpretation of 1026.4 · Official interpretation of 1026.17 · 12 CFR 1026.18 · Appendix J

How the payments are calculated

• Principal and interest is a fully amortizing fixed payment. The monthly rate is the annual rate divided by 12. A zero rate divides principal by the number of months. Each displayed payment is rounded half up to the cent.
• A temporary plan's cost is the sum of the monthly principal-and-interest gaps against the full note-rate payment, for each 12-month step, on the note loan amount. The subsidy does not reduce the loan balance.
• Monthly tax is the annual tax estimate divided by 12. Monthly insurance is handled the same way. In this comparison that is $760.00 of tax and $140.00 of insurance each month.

Published limits, for reading only

The calculator does not apply these limits. A lender still has to review the file.

• Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions (IPCs)

  Section date May 7, 2025. Maximum financing concessions depend on occupancy and LTV/CLTV and use the lower of sales price or appraised value. A temporary or permanent buydown subsidy funded by an interested party is included in the IPC calculation. This draft does not collect occupancy or appraised value. Freddie Mac guides and lender overlays can differ, so the Fannie Mae table is not a universal conventional cap.

• HUD Handbook 4000.1, Interested Party Contributions

  Handbook last revised August 12, 2026, section II.A.4.d.iii(G). Interested parties may contribute up to 6 percent of the sales price toward specified costs. That limit also includes interested-party payment for permanent and temporary interest rate buydowns and payment of the upfront mortgage insurance premium. Contributions over 6 percent of the purchase price, or over actual eligible costs, are inducements to purchase. This draft does not apply that limit.

• VA home loans: Temporary Buydowns

  Seller or builder temporary buydowns are seller concessions. VA states those concessions are capped at 4 percent of the reasonable value, and that lenders qualify the borrower on the full monthly payment after the buydown ends. Reasonable value is a VA value, not the purchase price typed here. This draft does not apply that cap. The lender handbook controls the final reading.