USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5 — Funded Buydown Accounts

usda-hb-3555-11-5

USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5 — Funded Buydown Accounts. Current text: Chapter 11 as revised 11-25-25 by USDA Procedure Notice 651, verbatim from the chapter PDF on rd.usda.gov.

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Verbatim provisions from USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶11.5 — Funded Buydown Accounts — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

USDA HB-1-3555, Chapter 11 (Ratio Analysis), § 11.5 — Funded Buydown Accounts

Effective 2025-11-25 · USDA chapter revision · Procedure Notice 651

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: • 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; • Buydown funds may come from the seller, lender, or other third party; • Buydown funds may not come from the borrower; • The buydown must not reduce the interest rate more than two percent below the full note rate; • The assistance may increase no more than one percent annually; • 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; • The buydown account must be fully funded at origination; and • A copy of the executed escrow agreement must be retained in the lender’s permanent loan file.

Source: USDA HB-1-3555, Chapter 11 (Ratio Analysis), § 11.5 — Funded Buydown Accounts · source URL · snapshot cac1a8312ee14429

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Source of record: https://claudeforcompliance.com/regs/usda-hb-3555-11-5/ · register usda-hb-3555-11-5 · verbatim, source-snapshotted regulator text from the Claude for Compliance corpus. To work from every register at once, download the corpus and follow the methodology.