How much can the seller contribute towards the closing costs of an FHA loan?

The seller can contribute up to 6% of the sales price towards the closing costs of an FHA loan. This provision allows sellers to assist buyers in covering closing costs, which can significantly ease a buyer's financial burden when purchasing a home.

The 6% cap on seller contributions includes a range of costs that can cover not only standard closing costs but also prepaids like property taxes and homeowners insurance. This flexibility is particularly beneficial for first-time homebuyers or those with limited financial resources, as it enables them to allocate more of their available cash towards the down payment or other essential expenses related to purchasing a home.

While the other options suggest different percentages or amounts that are significantly lower or even none, they do not align with the guidelines established for FHA loans. Thus, they do not reflect the actual policy provisions that allow for maximum seller contributions.