What is the maximum percentage for a Buy-Down in NACA?

In NACA's program, a Buy-Down refers to a process where the interest rate on a mortgage is reduced for a period of time through an upfront payment. This can make homeownership more affordable by lowering monthly payments, especially in the initial years. The maximum percentage for a Buy-Down is set at 5-6%. This threshold allows borrowers to effectively manage their mortgage costs while still benefiting from the overall terms of the NACA program.

The rationale behind allowing a Buy-Down of up to 5-6% is to provide sufficient financial relief to borrowers who may be challenged by higher initial payments before their financial situation stabilizes. This strategy also encourages homebuyers to enter the market, making homeownership more accessible to those who might struggle otherwise.

The values that fall outside this range are not permissible under NACA guidelines. Therefore, any options that suggest a lower or higher percentage do not align with the structured rules of the NACA program, which aims to ensure affordability and sustainability for the borrowers.