Definition
Builder financing is financing programs offered by builders or their affiliated lenders to facilitate home purchases. Programs might include construction-to-permanent loans, down payment assistance, or rate buydowns. Builder financing is convenient but may not be the lowest-cost option.
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See it in Buying new construction · Step 3About this term
Builder financing programs may include construction-to-permanent loans, down payment assistance, closing cost buydowns, or temporary rate buydowns. Programs vary by builder and availability. Builder financing may offer convenience but may not be lowest-cost option. Buyers should compare builder financing with conventional mortgage options. Some builders subsidize rates or offer incentives through financing programs.
Pro Tip
Compare builder financing with conventional options. Builder programs may offer incentives but aren't always lowest cost.
Example
A builder offers buyers construction-to-permanent loans at competitive rates plus 2% closing cost buydown for homes closing within 6 months.