Mortgage Answers / Money to Get Started
The Short Answer
Yes, a builder may offer a credit toward allowed closing costs. The offer, loan rules and your actual costs limit how much you can use. A credit is not the same as your down payment, and unused credit is not automatically cash you can keep.
Finding and Buying the Right Home. Compare the credit you can use with the money you still need.
Explore Your OptionsAllowed credit in the example below.
A down payment
Credits have limits and allowed uses.
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The headline credit may exceed what your loan or actual costs allow.
Check the amount, home, lender and closing date tied to the offer.
Ask the lender which costs qualify and what loan-program limit applies.
Request the money still needed after allowed credits, deposits and other adjustments.
A bigger credit does not always mean a lower total cost.
Compare the same home, loan type, down payment and time period.
Review fees, cash needed and the full payment, including what changes later.
Do not assume you must use the builder's preferred lender. Ask for the exact offer restrictions.
You may not be able to use every offered dollar. Ask before counting it in your budget.
A credit cannot simply create unlimited cash back when eligible costs are lower.
Discuss a different allowed offer or price change. The builder does not have to agree.
Have the lender and closing professional confirm the final credit and cash figures.
More than one path
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Check the amount, home, lender and closing date tied to the offer.
Ask the lender which costs qualify and what loan-program limit applies.
Request the money still needed after allowed credits, deposits and other adjustments.
Compare the same home, loan type, down payment and time period.
Review fees, cash needed and the full payment, including what changes later.
Do not assume you must use the builder's preferred lender. Ask for the exact offer restrictions.
Example only: $12,000 down payment plus $10,000 in eligible closing costs equals $22,000. If a $6,000 builder credit is allowed and fully usable, $16,000 remains before deposits and other adjustments. The credit in this example pays costs, not the down payment.
Ask for written incentive terms. Some offers depend on a lender, closing date or home. Compare an outside lender's Loan Estimate too. Look at fees, the full payment and cash needed, not just the advertised credit. Get any restrictions reviewed before signing.
Do not assume so. Credits toward closing costs and the money required for your down payment follow different rules.
Not automatically. Ask the lender how an excess credit must be handled under your loan rules.
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Willa Henderson
Fayetteville, NC
We were blown away by how fast and seamless our closing process was with Troy. He locked in a great rate quickly and handled every detail so we could move into our home on schedule!
Yara Mansfield
Show Low, AZ
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Boulder, CO
Every buyer's situation is different. Let's find the right path for you.