Hello everyone,

I am purchasing a duplex that is fully leased and the seller has decided to credit me the security deposit ($600) and rent ($1200) for the month of October at closing to be reflected on the HUD.

Since there is a rule with conventional loans that states the seller can only contribute up to 2% towards buyers closing costs and pre-paids will accepting the rental and security deposit credit of $1800 from the buyer at closing be affected by this rule since I have already negotiated that the seller pay 2% towards my closing costs and pre-pre-paids? Thank you.

Confirm with the title company or closing attorney, but these are items that the seller will have collected from the tenant that rightfully belong to you (because they go with the property/tenant) and this is the typical way of handing over those funds at closing.  Since these credits are for amounts the seller would owe you anyway, they should be independent the 2% contribution toward closing costs

@Doug McLeod  

Thank you, Doug.  I will confirm with my lender and see if this is an issue.  This is my first time closing with conventional so I just wanted to be sure and not lose out on $1800.