On April 20, 2026, the U.S. Department of Agriculture’s Rural Housing Service published a proposed rule in the Federal Register that could meaningfully improve how USDA Single Family Housing Guaranteed Loan Program (SFHGLP) transactions work in practice. The proposal clarifies that real estate commission fees would no longer be counted toward interested party (seller) concession limits under the program.
This change may sound technical, but it addresses a long‑standing issue that has had very real impacts on homebuyers, sellers, lenders, and Realtors, particularly in rural and moderate‑income markets.
What’s Changing Under this Rule
Seller concessions are capped (commonly referenced as 6 percent of the sales price). Until now, real estate commissions have effectively been swept into that same cap, even though they are a standard cost of selling a home, not a buyer incentive.
The proposed rule would explicitly exclude real estate commission fees from the interested party limitation, meaning commissions would no longer reduce the amount of allowable seller concessions that could be used to support the buyer’s closing costs or prepaid expenses.
The comment period for this proposed rule runs through June 22, 2026.
Why This Matters in Real Transactions
For buyers using USDA‑guaranteed loans, a sellers concessions often plays a critical role, as the ability to negotiate seller‑paid costs can be the difference between qualifying for a loan and walking away from a deal.
In day-to-day transactions, counting Realtor commissions toward the same cap led to several unintended consequences:
- Reduced flexibility to structure deals that work for both buyers and sellers
- Compressed concessions, forcing trade‑offs between closing cost assistance and other necessary credits
- Confusion among Realtors, lenders, and sellers about what was truly allowable
- Lost contracts, particularly in modestly priced rural transactions where margins are already thin
From a practical standpoint, commissions are not concessions to the buyer. They are compensation for services that facilitate the transaction and are already reflected in the sales price.
A Reasonable Distinction
The USDA’s proposed clarification recognizes an important distinction:
A seller paying a Realtor is not the same as a seller subsidizing a buyer’s costs.
This distinction is especially important in rural markets, where:
- Properties may take longer to sell
- Sales prices may be lower
- Closing cost assistance can be essential for affordability
Potential Benefits
If finalized, this change could offer several practical benefits without increasing risk to the program:
- Expanded access for eligible USDA buyers who rely on seller concessions
- Cleaner contract negotiations, with fewer artificial constraints
- Greater consistency across loan programs, reducing confusion in the marketplace
- Improved deal stability, particularly in entry‑level and rural housing transactions
It is also fair to ask why commissions were ever treated as seller concessions in the first place. They do not increase the buyer’s purchasing power or provide a financial advantage beyond enabling the transaction to occur.
In that sense, this proposal reads less like an expansion and more like a course correction.
What Happens Next
This is still a proposed rule, and USDA has invited public comment before finalizing it. Stakeholder feedback, especially from lenders, housing agencies, Realtors, and rural housing advocates, will likely shape the final outcome.
Submit your public comment by June 22, 2026, at Regulations.gov search for RHS-25-SFH-0003 and click on the comment button.