Seller-Paid Buydowns

What is a Seller-Paid Buydown?

In a high-rate environment, a temporary buydown is often the most overlooked path to monthly affordability. Sellers and builders use buydowns as a creative concession that benefits the buyer without dropping the sale price.

The most common structure is 3-2-1: your effective rate is 3 percentage points lower in year one, 2 lower in year two, 1 lower in year three, then settles at the permanent rate from year four on.

Buydown funds are held in escrow and effectively prepay part of your interest. If rates drop and you refi out, unused buydown funds return to the seller — but you keep the lower payments you already received.

A seller-paid buydown reduces your effective interest rate during the first 1–3 years of the loan — easing into homeownership during the most cash-strapped years.

Who qualifies for a Seller-Paid Buydown?

This program is built for borrowers who match the criteria below. Not sure where you stand? Send us a quick message and we'll confirm in minutes.

• Buyers nervous about today's rate environment
• Newly relocated buyers with first-year transition costs
• Anyone negotiating for seller concessions in slower markets
• Move-up buyers stretching budget temporarily

Advantages of Seller-Paid Buydowns

• Lower Year-One Payments — 3-2-1 buydown drops rate by 3%, 2%, 1% in years 1, 2, 3.
• Seller-Funded — Cost is paid by the seller as a concession — common in slower markets.
• Permanent Rate Stays Available — After buydown period, rate returns to permanent locked rate.
• Refinance Optionality — If rates drop, you can refi out during the buydown period.

How the process works

1. Negotiate Concession — Your agent negotiates the buydown as part of the offer.
2. Lock Permanent Rate — Lock the underlying 30-year rate.
3. Seller Funds Escrow — Buydown funds escrowed at closing.
4. Reduced Payments — Enjoy 1–3 years of reduced payments before rate steps to permanent.