Effective August 31, 2026, an important conventional lending update gives buyers, sellers and Realtors more flexibility when personal property is included in a real estate purchase contract.
Under previous guidance, items such as furniture, automobiles, decorator allowances, moving costs, and other giveaways generally had to be removed from the purchase contract through an executed addendum.
The updated guidance changes that.
What’s Changing?
Personal property may now remain in the purchase contract without automatically being treated as a sales concession or Interested Party Contribution, commonly called an IPC.
To qualify, all of the following conditions must be met:
- The items are clearly identified in the purchase contract.
- The items are customary for the local market.
- No contributory value is assigned to the items.
- The contract clearly states that the items are being left for the seller’s convenience.
- The appraiser excludes the items from the opinion of value and does not rely on them in the valuation analysis.
- The items do not influence the property’s sales price, marketability, or appraised value.
This means certain personal property can remain in the contract without requiring an addendum, provided the language and appraisal treatment meet the new requirements.
What Counts As Personal Property?
Personal property generally includes items that are not customary to the real estate transaction.
Examples may include:
- Furniture
- Automobiles
- Golf carts
- Moving cost allowances
- Decorator allowances
- Other giveaways
Customary items such as lighting fixtures and built-in appliances are generally treated differently because they are commonly associated with the property.
Why This Matters to Realtors
This update may reduce last-minute contract revisions and unnecessary addenda when personal property is included in a transaction.
However, the wording still matters. The contract should clearly identify the items, confirm that no value is being assigned to them, and state that they are being left for the seller’s convenience.
The appraiser must also exclude those items from the property’s value.
If the personal property influences the price, marketability, or appraised value, it may still be treated as a sales concession and become subject to contribution limits.
Conventional IPC Limits
For a principal residence or second home:
- Greater than 90% loan to value: maximum contribution of 3%
- 75.01% through 90% loan to value: maximum contribution of 6%
- 75% loan to value or less: maximum contribution of 9%
For an investment property:
- All loan to value ratios: maximum contribution of 2%
Important Reminder
This guidance applies to conventional loan products only. It does not change the requirements for FHA, VA, USDA, or other government loan programs.
Before including furniture, vehicles, golf carts, or other personal property in a purchase agreement, connect with the lender early. A quick contract review can help prevent appraisal concerns, underwriting delays, and unexpected financing issues.
The best transactions are built with the right strategy before the offer is written.
Have a unique property or contract situation? Send it my way. I am always happy to provide a second opinion and help structure a financing plan that protects the client and the closing.
*Program terms, eligibility, loan limits, LTV requirements, reserve requirements, property eligibility, rates, fees, and underwriting guidelines are subject to change. Not all borrowers or properties will qualify. Additional restrictions may apply.