How does a 2-1 temporary buydown work?

The note rate stays fixed, but the borrower pays a subsidized lower rate in year 1 (2% below) and year 2 (1% below), then the full note rate from year 3 on. Someone funds the subsidy account at closing — builder, seller, or buyer.

Does a buydown make qualification easier?

Often underwriting still qualifies at the note rate (not the year-1 payment), depending on program. Buydowns are primarily a payment-affordability and marketing tool, not a free credit boost.

Conventional & Government

Buydown

2-1 Temporary Buydown

Name: Elite Fundings — California Mortgage Team
Address: 552 E Badillo St, Covina, CA, 91723, US
Telephone: (626) 833-7449
Price range: $$

Temporary rate reduction of 2% in year 1 and 1% in year 2, returning to note rate in year 3.

Available throughout Southern California through Francisco Williams, CCIM, NMLS #1858674.

Apply for this program (626) 833-7449

Ideal borrower

Buyers in higher-rate environments negotiating seller-paid buydown.

Program highlights

Year 1 rate = note rate − 2%
Year 2 rate = note rate − 1%
Year 3+ at note rate
Typically seller-paid as concession

Typical uses

Seller-funded rate relief on new purchases

Frequently asked questions

How does a 2-1 temporary buydown work?: The note rate stays fixed, but the borrower pays a subsidized lower rate in year 1 (2% below) and year 2 (1% below), then the full note rate from year 3 on. Someone funds the subsidy account at closing — builder, seller, or buyer.
Does a buydown make qualification easier?: Often underwriting still qualifies at the note rate (not the year-1 payment), depending on program. Buydowns are primarily a payment-affordability and marketing tool, not a free credit boost.

Program details shown are representative guidelines and subject to individual lender overlays and CFPB / agency requirements. Rates shown are illustrative and subject to change without notice. Actual rate, APR, and terms will depend on creditworthiness, loan-to-value, property type, occupancy, loan amount, loan program, and other factors. Not all applicants will qualify.