Temporary Interest Rate Buydowns
Newrez LLC "Newrez" Approved Correspondent Clients; Newrez is pleased to announce that temporary interest rate buydowns are now eligible for conventional conforming, FHA, VA, and USDA loan transactions. These changes are effective immediately for locked loans and loans in pipeline.
Highlights
The following highlight the eligibility for temporary interest rate buydowns, as applicable per product:
- Fixed rate products
- Purchase transactions
- Primary residence and second homes
- Minimum 660 credit score
- Must qualify using the Note rate
- Buydown funds may come from
- The seller;
- The borrower (must come from borrower’s own funds and assets must be documented); or
- Any other interested party.
The following buydown plans may be eligible based on the specific product.
- 1-0: payment will be calculated at 1.00% below the Note rate for payments 1-12
- 1-1: payment will be calculated at 1.00% below the Note rate for the first two (2) years
- 2-1: payment will be calculated at 2.00% below the Note rate for payments 1-12 and 1.00% below the Note rate for months 13-24
- 3-2-1: payment will be calculated at 3.00% below the Note rate for payments 1-12 and 2.00% below the Note rate for months 13-24, and 1.00% below the Note rate for months 25-36
Refer to our Product Summaries and Underwriting Guides for complete temporary interest rate buydown requirements.