USDA Proposed Rule: Should Realtor Commissions Count Toward the 6% Seller Concession Cap?

Important: This article describes a proposed rule, not current USDA policy. As of July 2026, Handbook HB-1-3555 still counts seller-paid costs toward the 6% seller concession limit unless and until USDA publishes a final rule.

On April 20, 2026, USDA published a proposed rule in the Federal Register (Document Number 2026-07617, Docket RHS-25-SFH-0003) titled Single Family Housing Guaranteed Loan Program: Seller Concessions. The comment period closed June 22, 2026.

What USDA is proposing

The proposal would exclude real estate agent commissions paid by the seller from the calculation of seller concessions for Section 502 guaranteed loans.

USDA's stated rationale includes alignment with post-settlement commission practices and relief for borrowers when sellers pay buyer-agent commissions outside the traditional concession cap math.

If finalized as proposed, a seller could pay buyer-agent commission in addition to other seller concessions up to the existing 6% cap on remaining eligible costs (closing costs, prepaid items, and similar charges as defined in current handbook policy).

What still applies today

Until a final rule effective date is published:

• Treat all seller-paid costs under current HB-1-3555 and lender overlays
• Document seller credits and concessions per today's USDA and investor requirements
• Do not assume commission exclusion is already in force on new files

Broker workflow while the rule is pending

1. Label files clearly if purchase contracts allocate seller-paid buyer-agent commission separately from other concessions.
2. Confirm lender investor overlay; some lenders may adopt proposed treatment early or wait for final USDA text.
3. Monitor Federal Register for a final rule or withdrawal after the closed comment period.

Where to verify

• Federal Register proposed rule 2026-07617 (April 20, 2026): Regulations.gov docket RHS-25-SFH-0003
• Current guaranteed loan seller concession limits: USDA HB-1-3555 Chapter 6

For more on agency mortgage guidelines, see the Agency Guidelines hub.

This article is for informational purposes only and is not professional advice. Always verify against current guidelines before making decisions.