Mortgages with Temporary Subsidy Buydown Plans
Increase your market potential by offering borrowers lower initial payments and the stability of predictable payment increases.
Temporary subsidy buydown plans are a good fit for borrowers who have the capacity for higher earnings within a few years of obtaining a mortgage. Buydown plans allow borrowers to benefit from temporary subsidies of the monthly payment of principal and interest.
|Ineligible Mortgage Products||
|Maximum LTV Ratios (without secondary financing)||
Limited Buydown Mortgages
Extended Buydown Mortgages
|Single-Family Seller/Servicer Guide||
|Property Type||Fixed-rate, 7/1 & 10/1|
ARMs and 7/6-month & 10/6-month ARMs
|5/1, 3-year* and 5-year ARMs|
|1-unit primary residence or second home||Yes||Yes|
|2-unit primary residence or second home||Yes||Yes|
|3-4-unit primary residence or second home||Yes||No|
* Extended buydowns are not permitted on 3-year ARMs
Mortgages with temporary subsidy buydown plans help you:
- Qualify more borrowers who have the capacity for higher earnings within a few years of obtaining a mortgage.
- Offer reduced initial payments with an initial, bought-down interest rate.
- Cross-market temporary subsidy buydowns with Home Possible mortgages.
Benefits for Your Borrowers
Mortgages with temporary subsidy buydown plans provide your borrowers with:
- Reduced initial payments with a temporarily reduced interest rate.
- Predictable payment increases based on the predetermined structure of an extended or limited buydown.
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The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.