USDA’s Rural Housing Service will exclude real estate commission fees from the six percent seller-concession limit in its Single Family Housing Guaranteed Loan Program. The change leaves more room within that limit for sellers to help cover borrowers’ closing costs, necessary repairs and other permitted transaction expenses, according to the agency.
The final rule appears in the Federal Register issue dated November 9, 2026, and lists that same date as its effective date. The program provides loan guarantees to help low- and moderate-income people buy homes in rural areas.
Six percent limit stays in place
The six percent limit itself remains unchanged. The revised regulation excludes real estate commissions when counting contributions from a seller or another interested third party toward the buyer’s mortgage financing costs, closing costs, escrow accounts, furniture or other giveaways.
The regulation retains its qualification that USDA may otherwise provide for exceptions to the limit. The change concerns which expenses count toward the cap, rather than a general increase in the percentage sellers may contribute.
USDA says separating commissions from the calculation can allow borrowers to keep more of their own money for later expenses, including home improvements. The agency describes the revision as bringing its policy into line with prevailing mortgage industry standards.
Cash-back and fee safeguards remain
The agency received comments from 11 respondents on its April 20 proposed rule. Ten supported excluding commissions. One acknowledged potential benefits for buyers but warned that the provision could be misused to provide improper rebates.
In response, USDA pointed to existing restrictions. Applicants cannot receive cash back at closing beyond their out-of-pocket costs. Lenders must follow applicable consumer financial protection requirements, including limits on points and fees.
Lenders also must charge reasonable and customary fees and cannot charge more than they charge other applicants for comparable transactions. USDA concluded that those safeguards did not require further changes in response to the rebate concern.
