12K for closing costs seems abnormally high to me. Are you buying the rate down? What is the loan amount? It sounds like you are working with a broker. Additionally, if you are doing an FHA loan you can get those most places for less in cost. To answer your question: whatever difference it does't cover you will have to as a consumer. The 10 k concessions can be used for prepaids as long as it is written in the contract. Some of your pre-paids may be asorbed by a tax credit you will recieve depending on when you close. But if your only getting concessions of 10K and prepaids and closing costs are 12K, you will have to make up the difference out of pocket. Finally, I would shop around for mortgages and loan officers. I would never pay 8K in closing costs on any purchase. So if it's not too late I would look around and a second opinion for sure. Hope this helps! Call me if you have futher questions.