Subsidy Buy-Down

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January 1, 1 6 min read Definitions

Subsidy Buy-Down Interest Rate Reduction Homeownership Encouragement Seller Contribution Mortgage Assistance Programs

A subsidy buy-down is a type of mortgage arrangement where the interest rate is reduced either immediately or over the initial few years of the loan, with the reduction subsidized by a third party. This subsidy can come from various sources such as the seller, from government or non-profit programs, with the aim of making homeownership more affordable.