Seller-Funded 2-1 Buydowns

A seller-funded 2-1 buydown may cost the seller less than a particular price reduction, gives an eligible buyer temporary payment relief, and lets the listing agent market a financing incentive.

If the agreed commission is calculated as a percentage of the sale price, keeping the sale price unchanged keeps that commission calculation unchanged. The commission agreement controls the actual amount.

Here is the idea: an agreed seller contribution funds a larger payment subsidy in the first year and a smaller one in the second year. After two years, the buyer makes the full payment required by the mortgage note. The interest rate on your loan does not change. Fannie Mae’s temporary-buydown requirements.

Depending on the actual financing, the subsidy may deliver more initial payment relief at a lower seller cost than a particular price reduction. I can calculate that financing comparison for the specific scenario. Pricing decisions belong with the seller and their Realtor.

My part is making the loan side clear:

• What the seller-funded incentive would cost.

• What the buyer would pay during each stage.

• Whether the buyer and loan qualify.

• How the contribution fits with other eligible seller assistance.

The best fit is a buyer who is ready for the full payment and values additional breathing room at the beginning. For loans following Fannie Mae’s temporary-buydown rules, qualification uses the full interest rate on your loan. A future refinance should not be needed to make the plan work.

Have an Ohio buyer or listing where this could help? Ask me about a seller-funded 2-1 buydown. I can show you what the financing incentive would look like before anyone commits to it.

Gordon Hinchen, Mortgage Loan Originator | NMLS #2751302 DRG Mortgage, LLC | NMLS #2657603 Ohio residential mortgage brokerage services only. Equal Housing Opportunity.

Educational information, not a loan commitment or rate offer. Eligibility, seller-contribution limits, and program availability apply. Temporary payment assistance does not guarantee loan approval or refinancing.