USDA finalizes rule excluding real estate commission fees from rural loan program’s seller concession cap

USDA has finalized a rule, supported by NAR, that excludes real estate commission fees from the cap on seller contributions in its Single Family Housing Guaranteed Loan Program, which backs home loans for low- and moderate-income buyers in rural areas. NAR submitted comments in June urging USDA to finalize the proposal. The rule took effect November 9.

Under the program, a seller may contribute up to six percent of the sales price toward a buyer’s closing costs and other expenses. USDA had already excluded commission fees from that limit through its loan handbook and administrative exception authority. The final rule writes that policy into the regulation, giving lenders and buyers a permanent standard. USDA adopted the rule as proposed and said the change aligns the program with prevailing mortgage industry standards.

Professional representation is especially important for rural homebuyers, who often face unique challenges related to housing inventory, financing options, and geographic distance. By excluding buyer broker fees from the seller concession cap, USDA is helping ensure these borrowers can continue to access expert guidance throughout the homebuying process.