Mortgages & Loans
What Is A Builder Buy Down Loan ?
A Builder buy down loan is a mortgage loan on newly developed property that the builder subsidizes during the beginning years of the development. The builder uses cash to buy down the mortgage rate to a lower level than the prevailing market loan rate for a period of time. The typical buydown is 3% of the interest rate amount for the first year, 2% for the second year, and 1% for the third year. This type of loan is often referred to as a 3-2-1 buydown loan.
Note If you need professional help with "Mortgages & Loans" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.