Edited and reviewed by CEO Vatche Saatdjian — 30+ years of experience — Expert on FHA loans
Learn how temporary 2-1 and 3-2-1 mortgage rate buydowns work in Nevada. Understand seller-paid buydowns, qualification benefits, payment examples, and whether a buydown makes sense for Las Vegas and Reno homebuyers in 2025.
Key Takeaway: Temporary rate buydowns (like 2-1 and 3-2-1 buydowns) lower your interest rate for the first 1-3 years of your mortgage. In Nevada's competitive market, sellers often pay for buydowns to make homes more affordable. You qualify based on the full note rate, but enjoy lower initial payments—perfect for Las Vegas and Reno buyers expecting income growth.
A temporary rate buydown is a mortgage financing strategy where your interest rate is artificially reduced for the first few years of the loan. The most common structures are:
Most popular option. Your rate is:
More aggressive savings:
Let's see how a 2-1 buydown works on a typical Las Vegas or Henderson home purchase:
Over the first two years, this Nevada buyer saves $7,344 compared to paying the full 6.5% rate from day one. The seller typically pays this buydown cost (~$7,500-$8,000) as a closing concession.
In Nevada's current market (2024-2025), sellers most commonly pay for temporary buydowns as an incentive to attract buyers. Here's how it works:
Seller credits 2-3% of purchase price toward buydown at closing
New construction builders in Summerlin, Henderson offer as incentive
Buyer can pay upfront if they expect income growth
How temporary rate buydowns work, seller-paid buydown benefits, qualification advantages, and whether a 2-1 or 3-2-1 buydown makes sense for Las Vegas and Reno homebuyers in 2025.
Key Takeaway: Temporary rate buydowns (2-1 and 3-2-1) reduce your mortgage payment in the first years of your loan. In Nevada's competitive market, seller-paid buydowns help buyers afford higher-priced homes while rates normalize. Your permanent rate stays the same—you just pay less initially.
A temporary rate buydown is a mortgage financing technique where the interest rate is artificially reduced for the first 1-3 years of the loan. The most common structures are:
Let's look at a typical Las Vegas scenario with a 7% note rate on a $360,000 loan (20% down on $450K purchase):
| Period | Effective Rate | Monthly P&I | Monthly Savings |
|---|---|---|---|
| Year 1 (2-1 buydown) | 5.00% | $1,933 | -$461/mo |
| Year 2 (2-1 buydown) | 6.00% | $2,158 | -$236/mo |
| Year 3-30 (full rate) | 7.00% | $2,394 | Standard payment |
Total Year 1 Savings: $5,532 • Total Year 2 Savings: $2,832 • Combined 2-Year Savings: $8,364
In Nevada's current market, seller-paid buydowns are the most common arrangement:
Instead of reducing the purchase price by $10,000, a Las Vegas seller might offer a 2-1 buydown (costing ~$8,400 in our example). This helps:
Lenders qualify you based on the actual first-year payment, not the full note rate. This creates significant DTI advantages:
Qualify using Year 1 rate (5% vs 7%)
$461/mo savings = ~$70K more buying power
Use savings for furniture, repairs, reserves