How Florida Buyers Are Getting a 0.99% Starting Rate on New Construction Homes
A simple breakdown of the 3-2-1 Temporary Buydown Program
Learn More
What Is a 3-2-1 Temporary Buydown?
A temporary buydown is a financing strategy where your mortgage interest rate starts lower than the final fixed rate, then gradually increases over three years before settling at a competitive long-term rate. Think of it as a stepping stone that helps you ease into homeownership.
Many Florida builders are offering this program as an incentive to help buyers afford their dream homes in today's market. The reduced payments in the early years give you breathing room when moving expenses and home setup costs are typically highest.
Unlike adjustable-rate mortgages, you know exactly what your rate will be each year. There are no surprises—just a predictable path to your permanent rate. After year three, your rate locks in for the remainder of your 30-year loan term, providing long-term stability and peace of mind.
How the Rate Structure Works
Here's the straightforward breakdown of how your interest rate progresses over time with the 3-2-1 buydown program:
01
Year 1: 0.99% Rate
Your first year features the lowest rate, giving you significantly reduced monthly payments right when you need them most—during the transition into your new home.
02
Year 2: 1.99% Rate
The second year brings a modest increase, still keeping your payments well below market rate while you settle into homeownership.
03
Year 3: 2.99% Rate
By year three, your rate continues its gradual climb, allowing you to adjust your budget incrementally rather than facing a sudden jump.
04
Years 4-30: 3.99% Fixed
From year four onward, your rate locks in at a competitive 3.99% for the remaining 27 years of your mortgage, providing long-term predictability.

Important Note: The APR (Annual Percentage Rate) will be higher than the note rate due to the buydown program structure and associated costs. Your lender will provide complete APR disclosure during the application process.
Why This Program Helps Florida Buyers
Lower Payments When It Matters Most
Moving into a new home comes with unexpected expenses—from furniture to landscaping to those surprise repairs. Reduced mortgage payments in years 1-3 free up cash flow exactly when you need financial flexibility.
Easier Loan Qualification
Lenders qualify you based on the lower initial payment, which can help you get approved for the home you want. This is especially helpful for buyers who are close to debt-to-income ratio limits.
Time to Grow Your Income
Many buyers see salary increases over the first few years of homeownership. The gradual rate increases align with career growth, making the higher payments more manageable by the time they arrive.
Refinancing Opportunity
If market rates drop in the next 2-3 years, you have the option to refinance into an even better rate before reaching your year 4 fixed rate. You're not locked in—you have flexibility.
Who This Program Is Perfect For
First-Time Homebuyers
If you're purchasing your first home and want to ease into mortgage payments while building equity, this program provides an ideal on-ramp to homeownership without stretching your budget too thin initially.
FHA and VA Loan Users
This buydown program works seamlessly with FHA and VA financing, allowing you to combine the benefits of government-backed loans with reduced initial interest rates.
Buyers Purchasing New Construction
Available exclusively on select new-construction inventory homes from participating Florida builders. These are move-in ready homes where builders are motivated to offer attractive financing incentives.
Income Growth Planners
Ideal for buyers expecting salary increases, career advancement, or additional household income within the next few years. The gradual rate increases align with your growing earning potential.
Important Program Details You Should Know
Understanding the full picture helps you make informed decisions about whether this program aligns with your homebuying goals:
Seller-Funded Incentive
In most cases, the builder or seller funds the buydown through closing cost credits or incentives. This means the reduced rates come at little to no additional upfront cost to you, making it an attractive offer from motivated sellers.
Potential Discount Points
Some programs may require buyers to pay discount points at closing to secure the buydown. Your lender will provide a detailed breakdown of any costs associated with the program during your loan estimate review.
Qualification Requirements
Standard property condition, lender approval, and credit qualifications apply. You'll need to meet minimum credit score requirements and debt-to-income ratios, though the lower initial payment can help with qualification.
Limited Availability
This program is only available on select inventory homes from participating builders. Availability varies by community and builder, and programs can end without notice as inventory sells or builder incentives change.
Time-Sensitive Offer
Builder incentive programs are time-limited and subject to change based on market conditions and inventory levels. Acting quickly ensures you don't miss out on these favorable terms.
Common Questions Florida Buyers Ask
Can I refinance before year 4?
Absolutely. You can refinance anytime without penalty. If market rates drop below your scheduled rate, refinancing could save you money. Many buyers use the 3-2-1 buydown as a bridge strategy while waiting for rates to improve, giving them the best of both worlds.
What happens after year 3 ends?
Your rate automatically adjusts to the final fixed rate of 3.99% for years 4 through 30. There's no action required on your part—the transition happens seamlessly. Your lender will notify you before each rate adjustment so you can plan your budget accordingly.
How does this compare to a permanent rate buydown?
A permanent buydown reduces your rate for the entire loan term but typically costs more upfront. The 3-2-1 temporary buydown focuses savings in the early years when buyers need flexibility most, with lower upfront costs. The right choice depends on your financial situation and how long you plan to keep the loan.
Do I have to use a specific lender?
Program requirements vary by builder. Some require you to use their preferred lender to access the buydown, while others allow you to shop around. Always compare offers and ensure you're getting competitive terms beyond just the buydown benefit.
Real Payment Examples
Let's look at how the 3-2-1 buydown affects your actual monthly payments on a typical Florida home purchase:
This example is based on a $300,000 loan amount with the 3-2-1 buydown structure. As you can see, the payment increases are gradual and predictable, giving you time to adjust your budget each year. By year 4, even though your payment reaches its permanent level, you've had three years to increase your income, reduce other debts, or build savings to accommodate the higher amount.

Note: Example payments shown are for principal and interest only and do not include property taxes, homeowners insurance, HOA fees, or mortgage insurance. Your actual payment will vary based on loan amount, property taxes, insurance costs, and other factors specific to your home purchase.
Making Your Decision
This Program May Be Right for You If:
  • You're comfortable with predictable, gradual payment increases over three years
  • You expect your income to grow during the initial years of homeownership
  • You want to maximize cash flow early on for furnishing and settling into your home
  • You're purchasing a new construction home with builder incentives available
  • You understand the long-term fixed rate and find it competitive with current market conditions
  • You may refinance within 2-3 years if rates drop further
Consider Other Options If:
  • You prefer a single consistent payment from day one without any changes
  • You're uncertain about future income stability or job security
  • You plan to stay in the home long-term and want the absolute lowest permanent rate today
  • You're uncomfortable with the year 4 rate being higher than current market rates
"The 3-2-1 buydown gave us the breathing room we needed as first-time buyers. Those lower payments in the first couple years helped us furnish our home and build our emergency fund."
— Recent Florida Homebuyer
Want to See If You Qualify?
Connect with a Florida Real Estate Expert
Whether you're a first-time buyer, moving up to a larger home, or relocating to Florida, understanding your financing options is the first step toward making a smart home purchase decision.
I can help you explore available 3-2-1 buydown programs on new construction homes, connect you with qualified lenders, and guide you through every step of the homebuying process.
Call or Text
(407) 759-5677
Visit Online
Jodenny Ogando
Florida Realtor & Mortgage Broker
Program details, rates, and availability vary by property, builder, and lender. Contact me for complete eligibility requirements, current program availability, and to discuss which financing strategy aligns best with your homeownership goals.