Loan Programs · Buying a home

Let the seller help with your payment

In a slower market, sellers and builders often offer concessions. One option is a buydown, where the seller pays to reduce your interest rate for the first years of the loan or for the full term. We help you decide whether a buydown or a closing cost credit puts you further ahead.

Seller-Paid Rate Buydown explained

A buydown is money paid at closing, often by the seller or builder, to lower the borrower's interest rate. A temporary buydown, such as a 2-1 or 1-0 structure, lowers the rate for the first one or two years and then the payment steps up to the full note rate. A permanent buydown uses discount points to lower the rate for the life of the loan. Seller-paid amounts count toward each program's limit on seller concessions, and for temporary buydowns, lenders generally qualify you at the full note rate. All financing is subject to credit approval and program guidelines.

Who it fits

  • Buyers who expect their income to rise over the next few years
  • Buyers purchasing new construction from builders offering incentives
  • Buyers negotiating with a seller who prefers a credit over a price cut
  • Buyers who plan to keep the loan long enough to benefit from a permanent buydown

Florida specifics

  • Builders in South Florida and across the state often advertise buydown incentives on new homes. We compare the incentive with a price reduction so you see the real value.
  • Higher Florida insurance and HOA costs affect affordability, so a temporary buydown can help in the early years, but you still need to be comfortable with the full payment.
  • Seller concessions in Florida purchase contracts need to be written correctly, and we work with your agent on the wording.
  • Funds left over from a temporary buydown escrow are typically handled according to the loan program and servicer rules if you refinance or sell early.

How it works with Justin

  1. We show you the full payment and the reduced payments under different buydown structures.
  2. Your agent negotiates the seller credit and writes it into the contract.
  3. At closing, the seller's funds go into a buydown account (temporary) or toward discount points (permanent).
  4. Your payment steps up on schedule until it reaches the full payment for a temporary buydown.

Documents to gather

  • Purchase contract with the seller concession written in
  • Buydown agreement provided by the lender
  • Standard income, asset and credit documentation

Things to consider

  • A temporary buydown ends, and you must be ready for the full payment when it does.
  • You qualify at the full note rate, so a buydown does not increase how much you can borrow.
  • Seller concession limits vary by program and down payment.
  • A price reduction or a closing cost credit can sometimes be worth more, depending on how long you keep the loan.

Share a few details and Justin will tell you whether Seller Buydown fits, with real numbers for your loan.

Seller-Paid Rate Buydown: common questions

What is a 2-1 buydown?

A 2-1 buydown lowers your interest rate for the first year by two percentage points and for the second year by one, then the rate returns to the full note rate for the rest of the loan. The seller or builder usually funds the cost at closing.

Is a seller buydown better than a lower price?

It depends on how long you plan to keep the loan and how much the seller is willing to give. A price reduction lowers your loan amount for good, while a buydown mainly helps early payments. We compare both with real numbers.

Do I qualify at the lower buydown payment?

No. For temporary buydowns, lenders generally qualify you at the full note rate. This makes sure you can afford the payment once the buydown ends.

How much can a seller contribute toward a buydown?

Each program caps total seller concessions, and the cap depends on the loan type and your down payment. A buydown counts toward that cap along with any closing cost credits.

What happens if I refinance during a temporary buydown?

Remaining buydown funds are usually applied according to the program and servicer rules, often toward your loan balance. We explain how it would work for your loan before you close.

Related loan programs

  • First-Time Home Buyer Loans — First-time home buyer loans in South Florida: low down payment options, Florida Housing programs, condo tips and a clear path from preapproval to keys.
  • Conventional Loans — Conventional home loans for South Florida buyers and owners: 2026 conforming limits for Palm Beach, Broward and Miami-Dade, down payment and PMI basics.
  • FHA Loans — FHA home loans in South Florida: low down payment, flexible credit, FHA condo approval and Palm Beach, Broward and Miami-Dade loan limits explained.
  • Construction Loans — Home construction loans in South Florida: one-time close and construction-to-perm options, builder approval, draws and Florida Building Code planning.

South Florida areas where it fits

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