Are lender credits only given for excess fees?

I would check with your local government to see if they have any grants

No, however all conforming loan programs only allow credits (regardless of their source) to be used for closing costs.. the only funds that can be applied to lowering your principal are the funds you bring in, gifted funds and or state or local grants... So if you're purchasing a home, and the seller has offered to pay $2000 towards your closings costs, but the lender also offered you a $2000 credit, but your total closing costs only add up to $3000, then either the seller or the lender will have to reduce their contributions.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347