Non Priority Member Buy Down Limit?

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    I see some comments out there, but no real confirmation. Is there currently a limit on how much I can buy down my interest rate? Is there a limit on what the seller can contribute? Is there a combined limit that both the buyer and the seller can contribute. Lastly, Can I use funds from a 401k home loan to further buy down my interest rate? I will be repaying the loan, with interest that I’m paying to myself at the end.

    I am a non priority member

    Thanks for your help


    There is one limit and it is a combined limit from all sources including buyer seller grants and gifts. There is a fee associated with non priority members buying down so the effective buy down is 0.5% lower than the actual cost of the points. I don’t know what the number is since it has changed. It might be 5 points.

    You can certainly use 401k to buy down your interest rate. You are still limited to the same amount of maximum buy down. Using your 401k loan will count as debt so think twice about doing it because it can potentially among other things reduce your affordability. You also have to have the funds transferred to your bank account prior to putting a contract in so before you take the loan out make sure you can repay it early incase the sale falls through via a bad home inspection or something like that. Also if you repay it immediately after the sale falls through would you be able to take it out again without waiting 12 months like some plans have in place.

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