Builder Incentive vs Rate Buydown 2027

Compare new construction builder incentive ($15-25k closing credit) vs builder-paid rate buydown 2027. Both common — different math.

Loan Type Overview

Specialty loan programs serve borrowers who don't fit conventional underwriting. Higher rates but flexible qualification.

Non-QM market growing as W-2 employment shrinks (gig economy, freelance). Demand for flexible programs rising.

Conventional: 2 yrs W-2, tax returns, DTI < 50%. Specialty: alternative docs (bank statements, assets, P&L), 25%+ down, higher rates.

Negotiate rate down with 25-30% down. Larger down = lender risk reduced = lower rate. Build relationships with non-QM specialists.

Source: nahb.org new home incentives, freddiemac.com builder programs. Last updated: May 2026.