source:
  type: guide
  id: usda-hb-3555-11.5
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5 —
    Funded Buydown Accounts
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5
    — Funded Buydown Accounts.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-11.5-full
  canonical_id: usda-hb-3555-11.5-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5 — Funded
    Buydown Accounts
  type: do
  tags:
  - regulator-direct
  - usda
  - usda-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5
      — Funded Buydown Accounts
    source_class: usda-handbook
    source_url: https://www.rd.usda.gov/sites/default/files/hb-1-3555_consolidated.pdf
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-05-25T14:10:13Z'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '11.5 FUNDED BUYDOWN ACCOUNTS Funded buydown accounts are designed
      to reduce the borrower’s monthly payment during the initial years (temporary
      buydown) or the full life (permanent buydown) of the loan. Permanent buydowns
      are fully funded and paid for at loan closing. The interest rate is fixed and
      will not change for the life of the loan. Temporary buydowns are eligible when
      the following guidelines are met: x The mortgage loan must be underwritten at
      the full note rate. Both the full note rate and the initial buydown rate must
      be entered into GUS; x Buydown funds may come from the seller, lender, or other
      third party; HB-1-3555 (03-09-16) SPECIAL PN 11-12 Revised (05-05-25) PN 640
      Guidance documents lack the force and effect of law, unless expressly authorized
      by statute or incorporated into a contract. USDA may not cite, use, or rely
      on any guidance that is not available through their guidance portal, except
      to establish historical facts. x Buydown funds may not come from the borrower;
      x The buydown must not reduce the interest rate more than two percent below
      the full note rate; x The assistance may increase no more than one percent annually;
      x The borrower must agree in writing that the temporary buydown funds will be
      placed in an escrow with a financial institution supervised by a federal or
      state agency and paid directly to the lender each month to reduce the monthly
      mortgage payment; x The buydown account must be fully funded at origination;
      and x A copy of the executed escrow agreement must be retained in the lender’s
      permanent loan file.'
  judgment: false
