This loan program is favorable in a higher interest rate environment because it enables lower monthly payments during the first 2 years.
Year 1: In the first year, the interest rate is 2% lower than the note rate
Year 2: In the second year, the interest rate is 1% lower than the note rate
Year 3 & Beyond: Once the first two years are completed, interest is calculated at the note rate
Program Highlights:
- Borrower must qualify at the note rate
- Standard agency guidelines apply
- Only seller funds can be used to buy down the interest rate
- Borrower funds cannot be used
- Eligible on Conventional, FHA, and VA loans
- Primary, single family residence only