What is a 3-2-1 Buydown Mortgage?

The K. Hovnanian® Seller Buydown helps you realize your dreams.

Especially in times when interest rates are high, our focus is on you – not just in designing and building your dream home, but in helping you afford it. A Seller’s Mortgage Buydown reduces your monthly payments. It’s that simple.

Your goal? Lower monthly costs.    

The first few years of new homeownership bring new expenses, from the actual purchase price, to the costs of moving, to furnishing and tweaking the home to your tastes. Customer satisfaction is integral to K Hovnanian’s culture, so we’re offering 3/2/1 Seller Buydowns across the country to help cushion the impact of high rates.

Buying down Your Mortgage is easy as 3/2/1.

Have you googled “Buy Down Interest Rates”, but still have more questions than answers? Allow us to clear up any confusion, so as there’s no mystery to the 3-2-1 Seller Buydown. The Seller/Builder typically covers the costs, and the rates are distributed progressively over time.

How our 3/2/1 Seller Buydown works.

Let’s say you’re purchasing a K Hovnanian home at Harvest Meadows in Elyria, Ohio. As Sellers, we Buy Down the Interest Rate for your first 3 years in your new home. This allows you to ease into your full payments by scaling up slowly, and then in the 4th year you begin full monthly payments for the life of the loan.

For example, with a brand new $300,000 K. Hovnanian home at 7.002% interest rate, your monthly  payments can start as low as $1,407 per month in the first year, and you might be able to save more than $10,316 over time.*

To illustrate:


Saves $422 per month
The 3.875% rate is reduced from 7.002% APR
SAVE ~$5,070


Saves $289 per month
The 4.875% rate is reduced from 7.002% APR
SAVE ~$3,469


Saves $148 per month
The 5.875% is reduced from 7.002% APR
SAVE ~$1,776

YEARS 4-30

Monthly P&I payment:
$1,830 for the life of your loan at a rate of 6.875%                                     

(All numbers from K. Hovnanian Ohio 11/ 2022)

There are also opportunities in which K. Hovnanian can cover interest costs in a 2/1 Buydown (2 years). Or, perhaps we might buy down the interest rates permanently on a 30-year fixed mortgage, say from 6% to 4%.

The upsides?

If your Seller offers to do a Buydown, all sides are up except your payments! Buydown Mortgage costs are tax deductible, and the 3/2/1 gives you a chance to step into payments slowly, as they level up. All you have to do is expect to pay less every month for the Seller Buydown schedule of your choice.

For more information on how a 3/2/1 can work for you, please contact K. Hovnanian® American Mortgage, LLC™ at https://www.khovmortgage.com/.

Last Updated on November 16, 2023