New build… interest rate buy down

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    My husband and I just recently started the NACA process. We’re looking to purchase a new build. We was interested in buying down our interest rate. Is there a secret to get the builders to contribute to buying do interest rate ? Also would we be able to add funds on top of what they provide.

    Please help.


    There’s no secret outside of analyzing the market the neighborhood and the builder and knowing when to ask and what to ask for.

    Houses and especially full developments that are completed where there’s only one vacant house are more likely to have good deals because the builder wants to get it off their plate. You might see deals in December too.

    If the house isn’t built yet, if the development is only half way done with a lot of empty lots and if you ask for a lot of complimentary builder incentives like stainless steel appliances you would be less likely to have a contribution.

    But then again if the market is hot it may not matter the builder won’t budge because they get cash offers left and right.

    The only person who will truly know will be your real estate agent who should understand the exact scenario applied to the specific house you want.

    And yes you can add funds in addition to the seller.

    • This reply was modified 5 months, 1 week ago by Nelsont.

    Hey NelsonT

    Thanks for your response. The subdivision where I’m looking to buy hasn’t even started building homes yet. The entire place has empty lots. We’re interested in one of their inventory homes which already has the permit to build. Just waiting and hoping to get a NACA qualification.

    Would it be a good idea to ask for it right from the jump ?? We’re definitely not hard to please when it comes to appliances ….


    Well again talk to your agent because they will have the best lay of the land. What makes for a perfect negotiating tactic for one builder might be horrible for another.

    Generally I would start by asking for the moon. Let them counter and nibble your offer down as opposed to trying to get them to keep adding to theirs.

    So yes absolutely start by asking for contributions. You don’t want to settle on a set of terms and then say oh by the way I need you to front me some cash for this to work.



    More likely than not, it will depend on the builder’s policies on financing. Most major builders have “their own financing”, or in other words, a separate division of the company that acts as a mortgage broker. Very simply it’s an additional profit center for them. They promote it as a convenience to you and even offer incentives such as upgrades, money for closing costs, etc. to use “their” financing.

    In some cases, their policy may state that if you come to them with an approved financing offer that they cannot match or beat, they will give you the upgrades anyway. You will have to do the homework to find out what your builder’s policies say.

    The one thing you can’t do is take the word of the builder’s rep. Sadly, I have seen too many cases where the rep will tell the member a flat-out lie when we already knew what their corporate policy is, just so the rep can get a bigger commission.

    Start by contacting their corporate headquarters and talk to someone in their finance department. Ask them straight up to give you the incentives if you get approved financing with terms they cannot match. Then get them to send you a copy of their written corporate policy supporting what they told you.

    It’s a situation where you may have to play a little hardball with them, but if they want your business badly enough, they’ll find a way to make you happy.

    Tim Trumble
    Online Operations, NACA


    For us, with Ryan Homes, they offered $10,000 closing cost help if you went through NVR Mortgage, their in-house mortgage service. However, we found out that if we applied through NVR and proceeded with a good faith effort, but got denied (as we knew we would due to a Foreclosure on my record) they would still give us the help. New Construction tries to make you see your home purchase as an “off the shelf” experience, but always negotiate, and get your Realtor involved to help – that’s their job. Getting closing cost help when purchasing any kind of home is very much “in bounds” on any transaction, and it makes an absolutely -enormous- difference when applied to interest rate buy-down.

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