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Concept · updated 2026-09-16

Builder Rate Buydowns

Do builders buy cheap loans by the millions to bait buyers? Yes, with two corrections. Nine chapters, every claim tagged.

Status: complete first pass

V verified — safe P primary read — safest S secondary — hedge it ? unsourced — never on air

How to Use This

This is the prose layer. The evidence layer is Builder Rate Buydowns — every claim there carries a confidence tag and a source. Web version: https://concepts.rycolston.com/builder-rate-buydowns/

Rule before you record anything: if a sentence here matters, open Builder Rate Buydowns and check its tag. V and P are safe. S needs a hedge. ? does not get said out loud.

Nine chapters. Chapter 1 is the answer. Chapters 2 through 5 are how it works and what it costs. Chapter 6 is the catch. Chapter 7 is what a resale agent does about it. Chapter 8 is the Texas roster: who is advertising what, this month. Chapter 9 is everything else on the builder's shelf besides the rate.

Table of Contents

  1. The Answer — yes, and the real number is bigger than the rumor
  2. They Buy the Rate, Not the Loan — what a forward commitment is
  3. The Coupon and the Contract — three kinds of buydown people mix up
  4. The Builders' Own Numbers — D.R. Horton, Lennar, Pulte, in their own filings
  5. The Loophole — why the cap does not apply
  6. What the Buyer Is Not Told — the sticker, the lender, the resale
  7. The Same Move at Retail — what a listing agent can offer instead
  8. The Texas Roster — eighty-five builder rows and the number on their flyer
  9. The Rest of the Shelf — closing costs, flex cash, fridges, agent bonuses

1. The Answer

Evidence: §0, §4.1

Someone told you builders are buying cheap loans by the millions to hand out as bait. Here is the true version.

They do not buy loans. They buy a promise. A lender promises to fund a pile of future mortgages at a low rate. The builder pays for that promise up front. Then each buyer who walks in gets a loan out of the pile at the cheap rate.

And "millions" undersells it. D.R. Horton, the biggest builder in the country, told its shareholders it was holding $677 million of mortgage bonds that were not yet tied to any buyer. Those bonds exist for one reason. The company says so in its own words: "a program to offer below market interest rate financing to our homebuyers."

So the rumor is right about the what and wrong about the how. Keep reading for the how.

2. They Buy the Rate, Not the Loan

Evidence: §1, §2

The tool has a boring name: a forward commitment. Fannie Mae calls it a standby commitment. Same thing.

Here is the shape of it. The builder's own mortgage company goes to an investor. It says: hold ten million dollars of loan money for us, at five percent, for the next four months. The investor says: that costs you points. A point is one percent. The builder pays. Now the builder has a pool of cheap money with a clock on it.

The important part is when this happens. Fannie Mae's rule says the deal is made "prior to signing a sales contract with a borrower." No buyer exists yet. The builder is betting that buyers will show up before the clock runs out.

When a buyer does show up, the builder's lender pulls that buyer's loan out of the pool. The buyer sees one number on the flyer. In mid-2026 that number at D.R. Horton was about 4.9%, while the open market was about 6.5%.

How big is a pool? One national lender sells them in blocks of $3 million to $20 million, good for up to 150 days. A Texas lender's own example: three spec homes at $450,000 make a $1.35 million block. Buying a 5.5% rate for that block costs four points, which is $54,000, paid up front.

And the pool is a bet. D.R. Horton buys its pools "for the next few weeks of deliveries." When rates dropped fast in late 2023, the pools it had already paid for were suddenly worth less than the open market. The company took a $65 million charge in one quarter. Its CEO said the analyst who described it that way had "described it exactly."

Say it this way: They buy the rate before you exist. Then they sell you the house that comes with it.

3. The Coupon and the Contract

Evidence: §3

Three different things get called "a buydown." They are not the same.

The temporary buydown is the 2-1 or 3-2-1 you have heard of. The rate starts low and steps up one point a year until it reaches the real rate. Fannie Mae allows at most three years and at most one point per step. The buyer has to qualify at the full rate. It costs the seller about 2% of the price for a 2-1, about 4% for a 3-2-1. It is a coupon.

The permanent buydown is paying discount points at closing so one buyer's rate is lower for all thirty years. It costs up to about 6% of the price for a full-term cut. It is a bigger coupon.

The forward commitment is the wholesale contract from chapter 2. It is not tied to one buyer. It is bought before any buyer exists. And, as chapter 5 explains, it is exempt from the rules that limit the other two.

Builders talk about the coupon. They run on the contract.

4. The Builders' Own Numbers

Evidence: §4

You do not have to trust a reporter for this. The builders file it.

D.R. Horton. In late 2023, when this started, the company said about 60% of its closings used some form of rate buydown and it stayed "about a point to a point and a quarter below market." By mid-2026 its buyers were getting 4.9% against a 6.5% market. Its annual report says margins fell "as we increased sales incentives, such as buydowns of mortgage rates."

Lennar. In its Q2 2026 press release the company said its average sales price was $371,000, "reflecting approximately 12.9% in incentives, along with base price adjustments." On the call an analyst asked if that number includes price cuts or is buydowns only. The CFO said: "It does." A year earlier the figure was 13.3%, which one trade outlet worked out to nearly $60,000 on a $450,000 home. Lennar itself says normal is 4% to 6%.

Lennar in Texas. This is the one Texas-specific number from a builder's own filing. In the first half of 2024, Lennar's incentives ran 10.1% of price company-wide. In Texas they ran 16.9%, about $51,600 a house. Texas was the most expensive region Lennar had. That figure comes from a financial blog reading the 10-Q, so say "reported from Lennar's filing."

PulteGroup. Incentives were 10.9% of gross sales price in the first quarter of 2026. Two years earlier they were about 6%.

Across the biggest builders. AEI's loan-level analysis found that as of June 2025, about 64% of new homes sold by the largest builders carried a permanent buydown. The average cut was 1.3 points of rate. The average cost was about 5% of the loan.

The month-to-month picture. NAHB's August 2026 survey: 63% of builders were using sales incentives, 35% had cut prices, and the average cut was 6%. August was the sixteenth straight month with at least 30% of builders cutting prices. Realtor.com found that in late 2025, for the first time, new homes were getting price cuts more often than resale homes: nearly one in five new listings, against 18.3% of existing. In Texas it was 19.0% against 17.5%.

One warning before you quote any of these. "Incentives" in a builder's filing is a blend. It includes price cuts, closing-cost credits and upgrades, not only rate buydowns. Lennar says so in the same sentence. Only D.R. Horton breaks out the buydown share on its own.

5. The Loophole

Evidence: §5

Here is why the forward commitment beats the coupon, and it is a rule, not a trick.

Fannie Mae limits how much a seller can chip in toward a buyer's costs. The cap is 3% if the buyer puts down less than 10%. It is 6% with 10% to 25% down. It is 9% with 25% or more down. A builder-paid buydown counts against that cap. On a low-down-payment loan, 3% does not cover a full-term buydown. John Burns Research says it "eats up most (or all) of the maximum seller contribution allowed unless a forward commitment is used."

Then comes the exemption, in Fannie Mae's own words: forward commitments "are not subject to Fannie Mae's maximum financing concessions because they are not attributable to the specific loan transaction."

Read that twice. The cheap rate is not a concession on your loan, because the builder bought it before you existed. So it does not count.

AEI found that over 40% of large-builder sales carry concessions plus buydown cost above 6%. If the buydown counted, many of those loans would not be allowed.

Say it this way: The cap is three to nine percent. The forward commitment is exempt. That exemption is the whole business model.

6. What the Buyer Is Not Told

Evidence: §6, §7

Three things.

The sticker carries the cost. Somebody pays for the points. A Texas brokerage says builders "frequently inflate base price by 2% to 4% to offset buydown costs." That is one broker's read, not a study, so hedge it. But it fits what AEI measured: big-builder new-home prices rose about 6% more than resale homes and small-builder homes over the same stretch. AEI's read is that the buydown let big builders avoid a 10% to 12% price cut. The builders' own trade press disagrees and says the buydown is access, not inflation. Give both sides.

The lender is not your choice. A builder cannot legally force you to use its mortgage company. HUD tried to tighten that rule in 2008 and withdrew the attempt in 2009. But a builder can make the incentive vanish if you go elsewhere. That is legal and it is standard.

The resale is an open question. The next buyer of that house cannot get the builder's rate. AEI predicts those prices "will likely have to adjust." That is a forecast. Nobody has measured it yet. Do not say it as fact.

7. The Same Move at Retail

Evidence: §9

A resale seller cannot buy a forward commitment. A resale seller can buy a 2-1.

The math on a $350,000 loan at a 6.5% note rate: the full payment is about $2,212 a month. A 2-1 makes year one about $1,773 and year two about $1,987. The seller's cost is the difference, escrowed at closing: about $7,966. The buyer's first-year relief is about $439 a month.

Compare that to a price cut. An $8,000 price cut lowers the payment by about $50 a month. The buydown lowers it by $439. Same seller dollars, nine times the monthly relief in year one. And the sale price stays honest, which is exactly what the builder version does not do.

Two questions to hand a buyer who is looking at a builder's flyer:

  1. What is the gross price before the incentive?
  2. What does one outside lender quote on the same loan, with no incentive?

Say it this way: A builder's 4.99% is real. So is the extra two to four percent on the sticker, and so is the lender you did not get to pick. A seller-paid 2-1 gives the same first-year relief for about eight thousand dollars and leaves the price honest.

8. The Texas Roster

Evidence: §10

Ry asked for as many Texas builders as we could get. Three reading agents pulled the promo pages of about eighty-five builders across Dallas-Fort Worth, Houston, Austin and San Antonio on September 16, 2026. The full table, with a link for every row, is in the evidence file. Here is what it adds up to.

Who is big. By permits in August 2025, Lennar and D.R. Horton are one and two in both Dallas and Houston. San Antonio is led by KB Home, then D.R. Horton and Lennar. David Weekley, Perry, Taylor Morrison and Chesmar fill out the top fives.

What the flyer says. The number on the flyer is almost always the first-year rate of a temporary buydown. Toll Brothers' 3.99%, Sandlin's 3.99%, Coventry's 2.99%, Meritage's 2.99%: those are year one of a 2-1 or 3-2-1, and the rate climbs after that. The offers that are actually a thirty-year rate cluster at 4.99%: David Weekley, Perry, Tri Pointe, First Texas, History Maker. One or two go to 4.49%.

The string is always the lender. Nearly every row says "must finance with" the builder's mortgage company. K. Hovnanian puts a price on it: use another lender and the incentive drops by five percent of the home price.

Two builders say the quiet part. Coventry Homes, in all three metros, and DSLD in Houston, call their offer a "forward commitment" on their own page. Everyone else says "buydown."

Half the pages are stale. About a third of the offers carry contract windows that have already closed. Sitterle and CastleRock pages still show December 2025 deadlines. Beazer's page is from 2024. The sales office knows the live number; the website often does not.

Say it this way: In Texas right now the flyer says 3.99. Ask which year. Ask which lender. Ask what the price was before the flyer.

9. The Rest of the Shelf

Evidence: §11

The rate is the headline. It is not the whole shelf. Read the Texas promo pages and the same ten tools keep showing up.

Closing-cost credits. A flat dollar amount, usually capped at a percent of the price, and almost always tied to the builder's lender. Ten thousand is the common number. American Legend is at twenty.

Flex cash. One pot of money the buyer can aim at a buydown, closing costs, upgrades or the price. First Texas calls it $30K Flex Cash. Brightland goes to $40,000. Trophy Signature calls its version "$80,000 Your Way."

Design-center credits. Free or half-price options at the builder's studio. Highland in Houston offered half off up to $150,000 of options.

The move-in package. A fridge. Blinds. Sometimes a washer and dryer.

Price cuts on finished homes. History Maker advertised up to $55,000 off. Realtor.com found nearly one in five new listings had a price cut in late 2025, more than resale.

Extended rate locks. Taylor Morrison pays for a nine-month lock so the rate holds while the house is built.

ARM promos. A five-year adjustable at a low start rate, paid down by the builder. Coventry in San Antonio and Lennar in Austin.

Agent bonuses. Cash to the buyer's agent on top of commission. Century pays $2,000 to $5,000.

The two-lender split. D.R. Horton in Houston offers $15,000 in upgrades with any lender or $10,000 in closing costs with its own. K. Hovnanian cuts the incentive by five percent of the price if you bring your own lender.

Why the rate first and the price last? Because the rate moves the monthly payment the most, and the price moves the comps the most. Cut one house by $20,000 and every unsold house next door just lost $20,000 too. Give a credit and the recorded price holds. Lennar's own filings bundle all of it into one "incentives" number, and its CFO confirmed on the call that price cuts are inside that number.

Say it this way: Builders have a whole shelf. They reach for the rate first because it moves the payment. They reach for the price last because it moves the comps.

What is still unverified

Check Builder Rate Buydowns §"Not covered" before airing any of these: a DFW-only spend total, the D.R. Horton late-2023 charge on unused pools, Taylor Morrison's numbers, and whether new-build resales actually sell for less.

Evidence file

Every claim, tagged

The prose above is only as good as the tag on each sentence here. Read the tag before you say the sentence out loud.

Narrative companion: Builder Rate Buydowns - Curriculum — the read-through written to be taught. Web: https://concepts.rycolston.com/builder-rate-buydowns/

Builder Rate Buydowns — Evidence File

The question that started it: "Is there any truth to home builders buying lower-rate loans in the millions of dollars so they can use them as incentives for buyers?"

Every claim below carries a confidence tag. Read the tag before you say the sentence out loud.

Tag Means Safe to teach?
P Primary. I pulled the original document this session and read the sentence myself Yes — strongest tier
V Verified. Two independent primaries agree Yes
S Secondary. A reporter, a blog, or a subagent quoting the original. I did not open the original Only with a hedge
? Unsourced. Believed true, never checked No. Do not say on air.

0. The verdict P

True, with two corrections. Builders do not buy loans. They pay up front for a promise — a block of below-market mortgage money that a lender agrees to fund later. The industry name is a forward commitment (Fannie Mae also calls it a standby commitment). And "millions" is small: the largest builder carries hundreds of millions of pre-bought mortgage bonds for this purpose at any one time.

  • The tool exists by name in Fannie Mae's own rulebook (§2).
  • D.R. Horton's own annual report describes the program and sizes it (§4.1).
  • The rate gap the buyer sees is about 1.5 points (§4.2).

1. The wrong wording, and the right one

"Builders buy loans" — loose P

No loan exists yet when the builder pays. A forward commitment is bought before a buyer signs. Fannie Mae's rule text: standby commitments are agreements "between a builder and lender for blanket interest rate coverage that are executed prior to signing a sales contract with a borrower."

The right sentence P

A law-firm client alert states it cleanly: large builders "can offer reduced mortgage interest rates through 'bulk forward commitments,' under which a builder pays an upfront fee to secure a large pool of mortgage funds at below-market rates. Using these commitments, builders can offer permanent mortgage buydowns that lower interest rates for buyers."

Teaching line: They buy the rate, not the loan. They buy it before you exist.

2. How a forward commitment works

The definition, from the research house builders pay P

John Burns Research: "Forward commitments are the 'secret sauce' in new home sales today. A forward commitment is a block of money that builders use to originate mortgages at below-market rates, with some advantages over the better-known rate buydown. Some builders are spending 6.5% to 12%+ of the new home sales price to help buyers purchase a home using a forward commitment combined with other incentives."

The steps P

  1. The builder's mortgage arm (DHI Mortgage, Lennar Mortgage, Pulte Mortgage) asks a lender or investor to hold a pool of loan money at a rate below today's market.
  2. The builder pays points up front for that pool. One point is one percent of the pool.
  3. The pool has a dollar size and a clock.
  4. Each buyer's loan is drawn from the pool at the cheap rate as they close.
  5. The buyer sees one number, like 4.99%, while the open market is near 6.5%.

Block size and clock P

Guaranteed Rate, describing its builder program: forward commitments "enable builders to reserve between $3 million and $20 million in blocks of mortgage loans at lower-than-market interest rates for up to 150 days." And the sales pitch in one line: "Instead of reducing the price of the house, borrowers can take on a lower monthly mortgage payment by lowering the rate… 'By maintaining initial asking prices, builders can…'"

A worked example, from a lender that sells them P

A Texas mortgage lender's own explainer: a builder with spec homes at roughly $450,000 "commits to delivering $1,350,000 of loan volume in a forward commitment (or $450,000 in loan amounts x 3 home sales)" for 60 days. "A builder wants to advertise and offer a 5.5% interest rate… The lender then determines that a 5.5% rate cost of 4 points (which is 4% of the block)… the $1,350,000 block would then have a fee of $54,000." "Forward commitments are often locked in 30-day intervals. Most locks are done for 60 to 120 days." And the selling point: "a builder no longer needs to worry about what loan program the buyers chooses and the program's seller concessions limitations."

  • Source: Mortgage Mark, "Builder Forward Commitment", undated lender marketing page, fetched 2026-09-16. P for what a lender charges and promises; it is a sales page, so hedge the "no penalty for unused funds" line — that is this lender's pitch, not the market norm.

It is a hedge on the builder's books P

D.R. Horton files it as a hedging program: "We also use hedging instruments as part of a program to offer below market interest rate financing to our homebuyers." Full quote in §4.1.

3. The three things people mix up

Type What it does Builder cost Tag
Forward / standby commitment Buys a block of below-market money before any buyer exists Points on the whole block; exempt from concession caps P (§2, §5)
Permanent buydown Discount points at closing on one loan; low rate for 30 years "up to 6% of the home sales price" for a full-term buydown P JBREC
Temporary buydown (2-1, 3-2-1) Rate steps up each year, then snaps to the note rate "~4%" (3-2-1), "~2%" (2-1) of sales price P JBREC

Fannie Mae's limits on temporary buydowns P

"An interest rate buydown plan must provide for: a buydown period not greater than 3 years, and increases of not more than 1% in the portion of the interest rate paid by the borrower in each 1-year interval." And: "the lender must qualify the borrower based on the note rate without consideration of the bought-down rate." Also: "Fannie Mae does not place a limit on the total dollar amount of an interest rate buydown."

Teaching line: A 2-1 is a coupon. A forward commitment is a wholesale contract. Builders talk about the coupon and run on the contract.

4. The dollars — in the builders' own words

4.1 D.R. Horton holds hundreds of millions of pre-bought mortgage bonds for this P

From the fiscal 2025 annual report (10-K), year ended September 30, 2025:

"We also use hedging instruments as part of a program to offer below market interest rate financing to our homebuyers. At September 30, 2025 and 2024, we had MBS totaling $677.5 million and $637.9 million, respectively, that did not yet have IRLCs or closed loans created or assigned and recorded an asset of $1.9 million and $2.4 million, respectively, for the fair value of such MBS position."

Same filing, on why margin fell: "our home sales gross margin decreased to 21.5% as we increased sales incentives, such as buydowns of mortgage rates for our homebuyers."

  • Source: D.R. Horton Form 10-K, FY2025, SEC EDGAR, fetched and grepped 2026-09-16.
  • Plain words: MBS = mortgage-backed securities. IRLC = interest rate lock commitment. They own $677.5M of mortgage bonds not yet matched to any buyer, held so they can hand out below-market rates. This is the "block of loans" the question was asking about.

4.2 The rate gap the buyer gets: about 1.6 points P

D.R. Horton Q3 fiscal 2026 call, July 2026, Jessica Hansen: "We saw our average buydown decrease slightly to 1.6% from 1.7% in the second quarter. The mortgage rate for our buyers in backlog utilizing our mortgage company at June 30th was 4.9% against, call it, a rough market rate of about 6.5%. We're still in the market pretty consistently, with anywhere from, call it, 4.99%-5.5%, depending on mortgage product."

4.3 Where it started: late 2023 P

D.R. Horton Q4 fiscal 2023 call, 2023-11-07, Paul Romanowski: "we tend to stay about a point to a point and a quarter below market at any given time. And today, we're offering on an FHA government loans roughly in the 599 rate and on conventional and 6.25." And: "About 60% of our total closings are used with some form of a rate buy-down… the most successful incentive we have seen has been to impact that monthly cost of homeownership through some form of rate buy down."

  • Source: D.R. Horton Q4 2023 earnings call transcript, Motley Fool, fetched 2026-09-16.
  • Same call, prepared remarks: "We expect to continue utilizing a higher level of incentives in fiscal 2024, particularly rate buydowns in the current interest rate environment."

4.3b What happens when the pool goes unused: a $65 million charge P

Rates fell sharply in November–December 2023. D.R. Horton's Q1 fiscal 2024 call, 2024-01-23: gross margin fell 220 bps, and "One hundred basis points of the sequential margin decline related to the decrease in the value of hedging instruments we used to offer below-market interest rate financing to our homebuyers." An analyst asked whether this was forward-commitment pools going unused when the market dropped below the pool rate. CEO Paul Romanowski: "No, you've described it exactly. We — typically, we'll buy those forward commitment pools really for the next few weeks of deliveries, essentially, is the plan. We're not going out very far, but it is a few weeks. And so, that's when we say a very sudden, sharp change in rates then can present some exposure there." CFO Bill Wheat: "the amount of the charge is $65 million approximately." Jessica Hansen: "that 65 million mark-to-market is in cost of goods sold." Take rate that quarter: "in the 80% range of the buyers that utilize our mortgage company… say 60% to roughly 70% of buyers took that this quarter."

  • Source: D.R. Horton Q1 2024 earnings call transcript, Motley Fool, fetched 2026-09-16. Wolf Street's write-up (2024-01-24) led the agent to it.
  • Teaching line: The pool is a bet on rates for the next few weeks. When rates fall, the builder eats the bet. Horton ate $65 million of it in one quarter.

4.4 Lennar: 12.9% of price, and it is a blend P

Lennar's Q2 2026 press release (8-K exhibit, 2026-06-11), Stuart Miller: "Our average sales price was $371,000, reflecting approximately 12.9% in incentives, along with base price adjustments necessary to sustain volume." And: "the gap between our current incentive levels of 12.9% and normalized levels of 4% to 6% is narrowing for the first time in three years."

  • Source: Lennar 8-K Exhibit 99.1, Q2 2026, SEC EDGAR, fetched 2026-09-16.
  • The caution, confirmed on the call P: analyst John Lovallo: "does the 12.9% include base price adjustments, or is that just buy-downs?" CFO Diane Bessette: "It does. Yes… It does include those." Same call: 12.9% "down from 14.1% in Q1, and down from 14.5% in Q4 2025." Source: Lennar Q2 2026 call transcript PDF, 2026-06-12, fetched 2026-09-16. Never quote 12.9% as buydown spend.

4.5 Lennar a year earlier: 13.3%, "nearly $60,000 on a $450,000 home" S

NAR reporting: "At Lennar, incentives averaged 13.3% of the sales price in the second quarter—nearly $60,000 on a $450,000 home. 'These are outsized [incentives] for the moment,' co-CEO Stuart Miller said earlier this year. 'Normalized incentives should be around 5% to 6%.'"

4.5b Lennar in Texas: 16.9% of price, $51,600 a house (first half 2024) S

Wolf Street, reading Lennar's Q2 2024 10-Q: "In the first half of 2024, the average incentive costs, including the costs of mortgage-rate buydowns, rose to $47,100 per house sold, or to 10.1% of the average sales price, up from 9.2% a year ago… In Texas, they reached 16.9% or $51,600 per house. In 'Other' regions, which include Florida, they amounted to 13.4%, or $81,700 per house."

  • Source: Wolf Street, 2024-07-04, fetched 2026-09-16. S — the 10-Q table was not opened. This is the only Texas-specific incentive figure from a builder's own filing found in this run. Texas ran the highest of Lennar's regions.

4.6 PulteGroup: 10.9% of gross sales price P

Q1 2026 call, 2026-04-23: gross margin 24.4%, down from 27.5%, "attributed primarily to incentives equal to 10.9% of gross sales price, which increased 290 basis points year over year and 100 basis points sequentially."

4.7 The share of new homes sold with a permanent buydown: 64% P

AEI Housing Center: "As of June 2025, around 64% of new homes sold by the largest builders used a permanent buydown, with the share for smaller builders hovering around 13%. The average buydown rate discount stands at around 1.3 ppts, which on average would cost an estimated 5% of the mortgage amount in builder concessions."

4.8 More builders, in their own words

  • D.R. Horton Q2 2026 call P (2026-04-21), Jessica Hansen: "we did have 90% of the buyers that utilized our mortgage company get some version of a permanent and/or a temporary buydown this quarter… That's roughly 73% of our closings had some form of a buydown." Source: transcript, fetched 2026-09-16.
  • D.R. Horton, the advertised number P for the headline: "America's largest homebuilder D.R. Horton: We're leaning heavily into a 3.99% mortgage rate buydown… In fiscal Q4 2025, 73% of D.R. Horton homebuyers received a mortgage rate buydown, up from 72% in Q3 2025." Source: ResiClub, Lance Lambert, 2025-11-02 — paywalled; only the headline and deck were readable.
  • Taylor Morrison Q4 2024 P (call 2025-02-12): "38% of fourth quarter closings used mortgage forward commitments, with about half of users being first-time buyers." Source: transcript, fetched 2026-09-16. The "28% in Q4 2023" figure did not confirm — ?, do not air.
  • PulteGroup Q2 2026 10-Q P: "At June 30, 2026 and December 31, 2025, we had unexpired forward contracts of $1.9 billion and $1.3 billion, respectively, and whole loan investor commitments of $219.4 million and $270.6 million." Read with care: the filing describes these as hedges "from the time we extend an interest rate lock to a loan applicant until the time the loan is sold to an investor" — pipeline hedging, not a buydown subsidy line. Same filing names "mortgage interest rate buydowns" as one of three incentive tools. Source: 10-Q, fetched 2026-09-16.
  • Century Communities Q1 2026 S: incentives 12.5% of price; "buydowns continue to be the most important incentive." Evidence agent, filings not opened.
  • Meritage Q2 2026 S: gross margin down 400 bps to 17.5% on heavier incentives. Meritage's Q1 2025 release reportedly booked ~$400K of write-offs on expired rate buydowns — S, not opened.

Hedge on air for the S lines: "reported in their earnings materials."

5. The loophole — why builders prefer the forward commitment

The rule P

Fannie Mae caps what an interested party (the seller, the builder) may contribute:

LTV Cap
Over 90% 3%
75.01%–90% 6%
75% or less 9%

Then the exemption, verbatim: "Standby commitment (also known as forward commitment) agreements between a builder and lender for blanket interest rate coverage that are executed prior to signing a sales contract with a borrower are not subject to Fannie Mae's maximum financing concessions because they are not attributable to the specific loan transaction. Loans with a reduced interest rate due to a standby commitment must be delivered with SFC 887."

Why that matters P

John Burns: a normal builder-paid buydown "often eats up most (or all) of the maximum seller contribution allowed unless a forward commitment is used." With a 10%-or-less down payment "the seller's contribution is capped at 3% of the home's price, which does not cover the full cost of a 30-year buydown."

AEI: "Over 40% of sales by large builders have a combination of seller concessions plus permanent buydown cost in excess of 6%." And: "if buydown costs were included, an estimated 25% of GSE loans and 66% of FHA loans for new homes sold by the largest builders would exceed the 6% limit on seller concessions."

  • Sources: JBREC (2023-10-20) and AEI (2025-11-12), both fetched 2026-09-16.

Teaching line: The cap is 3 to 9 percent. The forward commitment is exempt. That exemption is the whole business model.

6. What the buyer is not told

The price carries the cost S

A Texas brokerage blog: "Builders frequently inflate base price by 2% to 4% to offset buydown costs." And: "Most Texas builders tie rate buydowns to their in-house or preferred lender, which may carry higher base pricing that offsets the incentive." Their bottom line: "A builder offering 5.5% with a $10,000 credit can still cost more over 30 years than an outside lender at 5.25% with no credit."

Prices got propped up P — AEI's finding

"As of December 2024, home price appreciation (HPA) of new homes sold by the largest builders was about 6% above that for both existing homes and new homes sold by smaller builders. This gap implies that the use of permanent buydowns has enabled the largest builders to avoid a 10-12% price cut on those homes with a buydown… When these new homes eventually enter the resale market, their prices will likely have to adjust."

  • Source: AEI, 2025-11-12, fetched 2026-09-16. This is a forecast about resale, not a measurement. No source found that measured new-build resale underperformance. ? for that specific claim — do not air it as fact.

The counterargument P

HousingWire's Builder's Daily, responding to AEI and a Wall Street Journal follow-up: "Rate buydowns offer a more effective affordability tool than price cuts, supporting both buyers and builders." The piece frames AEI's reading as "a scandalous narrative" and argues the buydown is access, not inflation.

Hedge on air: two credible sides. Say "AEI argues… the builders' press argues…"

7. The rules — can a builder require its lender?

Cannot require, can reward P

HUD tried to close this in 2008 and gave up in 2009. Federal Register, 2009-05-15: "This final rule withdraws the revisions to the definition of 'required use' as provided in HUD's November 17, 2008, final rule amending its Real Estate Settlement Procedures Act (RESPA) regulations… and leaves in place the definition codified in the RESPA regulations at 24 CFR 3500.2 prior to that revision." HUD added it "remains committed to the goals of RESPA reform and concerned about affiliated business practices that interfere with consumer choice."

Where the legal heat is now P

Benesch (2026-02-12): the risk is disclosure, not RESPA — California's Unfair Competition Law "may be used to challenge inadequate disclosures or inflated home pricing," and TILA "requires lenders to provide clear written disclosures of key loan terms." The alert names state attorneys general as the likely enforcers and says builders "face significant legal and enforcement risks if they engage in misleading practices or fail to provide clear disclosures."

  • No CFPB action found. ? on any enforcement having actually happened — none located.

8. The trend — growing, then flattening

NAHB, August 2026 P

Bill Owens, NAHB chairman: "NAHB surveys show that a majority of builders continue to offer sales incentives, including mortgage rate buydowns, to support new home sales." Same release: new-home inventory at 9.6 months' supply, "the highest measure since January"; median new home price $393,800.

NAHB builder-confidence survey, August 2026 P

"The latest HMI survey also revealed that 35% of builders cut prices in August, down from 37% in July… The average price reduction was 6% in August… The use of sales incentives was 63% in August, unchanged from the previous month." Robert Dietz: "August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40."

  • Source: NAHB, "Affordability Pressures Keep Builder Confidence Low", August 2026, fetched 2026-09-16.
  • Correction on record: the skeptic agent first reported "16th straight month above 60% incentives." The page says 16 months of ≥30% price cuts. The agent caught and corrected it when asked for the URL. The 63% incentive figure is a single-month reading, not a streak.

New builds now discount more often than resale P

Realtor.com's own release, 2026-02-12: "Nearly one in five new homes saw price cuts in late 2025, overtaking the resale market for the first time in recent history… In the same quarter, the share of existing homes with cuts was 18.3%." Texas: 19.0% of new-construction listings reduced vs 17.5% of resale. Median new-home list price $451,128, "up just 0.3% from a year earlier."

Lennar says the gap is closing P

"the gap between our current incentive levels of 12.9% and normalized levels of 4% to 6% is narrowing for the first time in three years." (§4.4)

9. What a resale listing agent can do with this

The same move at retail scale P for cost, V for the math

A seller-paid 2-1 buydown costs "~2% of the home sales price" (JBREC). My own amortization math, 2026-09-16, 30-year fixed at a 6.5% note rate:

Loan Full payment (P&I) Year 1 at 4.5% Year 2 at 5.5% Seller cost Year-1 saving / mo
$350,000 $2,212 $1,773 $1,987 $7,966 $439
$450,000 $2,844 $2,280 $2,555 $10,242 $564
  • The seller cost is the sum of the payment differences over 24 months; it is escrowed at closing and drawn down monthly. Fannie Mae permits it (§3); the buyer must qualify at the full note rate.
  • It counts against the concession cap (§5) — on a 5%-down conventional loan the cap is 3%, so a 2-1 fits and a full-term buydown mostly does not.

The two questions a buyer should ask a builder S

  1. What is the gross price before the incentive? (AEI: recorded prices are gross; concessions are rarely itemized.)
  2. What is one outside lender's quote on the same loan, no incentive? (LRG.)

Teaching line: A builder's 4.99% is real. So is the extra 2 to 4 percent on the sticker, and so is the lender you did not get to pick. A seller-paid 2-1 gives the same first-year relief for about eight thousand dollars and leaves the sale price honest.

10. Texas builders — who is advertising what (September 2026)

Ry asked for as many Texas builders as possible with their current rate offers. Three sonnet agents read builder promo pages on 2026-09-16, one metro group each. Builder promo pages are JavaScript-rendered and change monthly; a headless fetch returns nothing (tried on Lennar DFW and Highland HomeLoans — both blank). So the roster is S — an agent read the page — except the rows marked P, where the offer text came through in my own fetch. Every row carries the URL. Before you quote a rate to a customer, open the URL that day.

Who is biggest, by permits P

HBWeekly's Texas top-five by building permits, August 2025:

Metro 1 2 3 4 5
Dallas Lennar (226) D.R. Horton (203) permit office withheld (117) Texas Homes (82) David Weekley (66)
Houston Lennar (445) D.R. Horton (227) David Weekley (132) Perry (114) Taylor Morrison (84)
San Antonio KB Home (75) D.R. Horton (69) Lennar (60) Chesmar (32) Perry (20)
  • Source: HBWeekly, "Texas Top Home Builders — August 2025", fetched 2026-09-16. Austin's list is on the page but the fetch did not return it. Zonda / Builder magazine's 2025 "Local Leaders" per-metro tables (the industry-standard closings ranking) returned 403 to every agent — ? for per-builder closings ranks. Zonda's 2026 market-level list puts San Antonio at #4 and Austin at #5 among U.S. new-home markets S.

Dallas-Fort Worth — 31 builders

Builder Lender tied to the offer Advertised offer (as read) Strings Window Tag
Lennar Lennar Mortgage "3.99% fixed rate (4.799% APR) plus up to $10,000 in closing costs" select inventory; ~30–45 day close rolls per community S — the promo URL redirected to the DFW hub with no offer text when I loaded it
D.R. Horton DHI Mortgage "$10,000 that may be used toward closing costs, prepaid items, a permanent or temporary buydown, or any combination" DHI Mortgage; Dallas North / DFW Central; contract on/after 05/29/26 close by 08/29/26 — lapsed S
Perry Homes Crestmark / Parkstone Mortgage "buydown rate offer paid by Perry Homes" (rate not published site-wide) seller-contribution limits; lower-priced homes may not qualify per event S — URL 404 on my fetch
David Weekley Priority Home Mortgage "Rates as Low as 4.99% in Dallas/Ft. Worth" (5.063% APR) + up to $16,500 financing incentive must finance with Priority; offer presented before contract through 12/31/2026 P for the 4.99% headline
Highland Homes Highland HomeLoans "5.25% fixed years 1–2, 4.5% years 3–30 (6.000% APR)" on 60-day closes Highland HomeLoans contracts 08/05–09/07/26 — lapsed S
Bloomfield Homes preferred lender "$15,000–$25,000 … as rate points, design upgrades, or cash toward closing" select inventory monthly S — from an agent's blog, not Bloomfield's site
First Texas Homes preferred lender "AS LOW AS 3.49% RATE BUYDOWN OR UP TO $20K FLEX CASH" (Westside Preserve); agent read "4.99% 30-Year Fixed or Up to $30K Flex Cash" elsewhere on the page 680 FICO, 3.5% down, max loan $563,000; "until lender fund pool depleted" until funds gone P — varies by community
Grand Homes not stated no public offer; phone-only — — S
American Legend not stated "$20K toward closing costs" contract through 09/30/26 close by 03/31/27 S
Landon Homes preferred lenders "closing cost credits or interest rate buy-downs" — no fixed rate per community — S
M/I Homes M/I Financial "2/1 buydown … Year 1 2.875% (4.9249% APR), Year 2 3.875%, Years 3–30 4.875%" loan app within 48 hrs of contract close by 05/28/26 — lapsed; URL 404 on my fetch S
Century Communities Inspire Home Loans "3.75% adjusted interest rate (4.645% APR) for the first 5 years" Inspire Home Loans not stated S
K. Hovnanian K. Hovnanian American Mortgage no fixed rate; incentive cut 5% of price if KHAM or cash not used KHAM or all-cash per home S — the clearest "use our lender or lose it" line on the list
Toll Brothers TBI Mortgage "3.99% first-year rate (6.04% APR)" 2/1 buydown TBI Mortgage contracts 08/08–08/23/26 — lapsed S
Chesmar Homes preferred lender "3-2-1 Promo" temp buydown + "Imagine Happier Bonus" flex cash select move-in-ready not stated S
Taylor Morrison TM Home Funding "2-1 buydown … 2% below rate year one, 1% lower year two" 680 FICO; TMHF; seller's closing agent not stated S — from TM's explainer blog, not a DFW promo
Ashton Woods Velocio Mortgage "3.99% fixed interest rate and up to $5,000 in closing costs" select homes; Velocio "not required to purchase" phase close / month-end S
LGI Homes preferred lender "over $20,000 in potential savings" incl. special rates select move-in-ready rolling events S
CB JENI (Green Brick) not stated "4.99% (5.859% APR)" 2/1: Yr 1 3.99%, Yr 2 4.99%, Yr 3–30 5.99% select inventory contract by 07/31/26 — lapsed S
Southgate (Green Brick) preferred lender "5.99% (6.266% APR) starting rate" preferred lender ended 07/31/26 — lapsed S
Normandy (Green Brick) not stated general "2-1 buydown programs" language only per community — S
History Maker not stated "4.99% rates, up to $55,000 off, and hero discounts across 35 communities" select homes not stated S
Meritage Homes MTH Mortgage "as low as 2.99% in the first year and 3.99% in the second year" MTH Mortgage + Carefree Title; select QMI contract 05/02–05/31/26 — lapsed S — my fetch of the page showed only the MTH referral text
Trophy Signature not stated "rates starting at 3.99% plus $7,500 toward closing costs" / "$80,000 Your Way" up to $450K price, 720 FICO for 2/1 subject to change S
Impression Homes not stated "interest rates as low as 4.75%" + closing-cost help select inventory not stated S
Sandlin Homes not stated "3/2/1 Rate Buydown … rates as low as 3.99%" named communities not stated S
Drees Custom Homes First Equity Mortgage "2-1 … Year 1 3.49%, Year 2 4.49%, Year 3–30 5.49% (5.551% APR)" build-to-order, owner-occupied prior cycle Dec 2025 — verify S
UnionMain Homes UMH Mortgage "rates as low as 3.25% on select move-in ready homes" UMH Mortgage for closing-cost help not stated S
Britton Homes preferred lender no public offer; closing-cost language only — — S
Coventry Homes Jet Mortgage "4.99% rate forward commitment: Year 1 2.99%, Year 2 3.99%, Years 3–30 4.99%" government loans, primary residence; Jet "not required to buy" loans closed by 06/30/26 — lapsed S — note the builder uses the words "forward commitment" on its own page
Shaddock Homes preferred lender no current public offer; historically $10K–$20K + buydown per community — S

Houston — 24 builders

Builder Lender tied to the offer Advertised offer (as read) Strings Window Tag
Lennar Lennar Mortgage "3/2/1 buydown: 1.99% Yr 1, 2.99% Yr 2, 3.99% Yr 3, 4.99% balance (5.399% APR)" select move-in-ready page now shows no active promo text S
D.R. Horton DHI Mortgage "up to $15,000 upgrades any lender OR up to $10,000 closing costs (max 2% of price) w/ DHIM" contract in window prior window closed 09/30/25; no live Sept-2026 flyer found S — stale
David Weekley Priority Home Mortgage "starting rate as low as 3.99%" (quick move-ins); prior "4.99% (5.309% APR)" select QMI; Priority 05/01–06/30/26 promo expired; live rate not confirmed S
Perry Homes Crestmark / Parkstone "4.99% rate (5.178% APR) via buydown of points" Crestmark or Parkstone "Year End Sales Event 2025" — expired S
Taylor Morrison TM Home Funding "4.99% / 5.07% APR 30-yr fixed conventional, 9-mo extended lock" + separate 2-1 TMHF; 680+ FICO not stated S
DSLD Homes DSLD Mortgage "rates as low as 3.99% (6.788% APR) FHA/RD/VA + up to $12,000 toward rate buydown or closing costs, free fridge" DSLD Mortgage + seller's title co. write by 09/30/26, close by 12/31/26 — current S
Toll Brothers TBI Mortgage general "big temp/permanent rate buydowns"; no Houston number TBI Mortgage — S
Ashton Woods Velocio / Trailblazer Mortgage no Houston-specific rate found Velocio or Trailblazer for the special rate — S
Highland Homes First Equity Mortgage "QMI buydown: 3.5% Yr 1 / 4.5% Yr 2 (08/07–09/30/26); OR 3.625% / 4.625% / 5.625% for contracts 09/01–09/30/26" + "50% off Design Center (up to $150k) + $10,000 closing costs" non-contingent contract; First Equity contracts through 09/30/26, close by 10/31/26 — current S
Chesmar Homes not named "reduced closing costs or lower payment via rate buydown" per home not stated S
Coventry Homes Jet Mortgage (builder-paid forward commitment) "2/1 buydown: 3.49% Yr 1, 4.49% Yr 2, 5.49% Yr 3–30" government loans; primary residence; 640 FICO close by 09/30/26 — current S

| Meritage Homes | MTH Mortgage | "introductory rate as low as 2.99% (5.752% APR) + up to $7,500 closing costs" (2/1) | select Houston homes | through 09/21/26 — current | S | | K. Hovnanian | K. Hovnanian American Mortgage | "4.25% (5.037% APR) FHA 3.5%-down example"; also a 3/2/1 | contracts 07/31–08/31/26; KHAM | close by 09/30/26 | S | | Pulte | Pulte Mortgage | general 2/1 buydown; no Houston rate published | Pulte Mortgage for the advertised rate | not stated | S | | Beazer | Beazer Mortgage | "4.99% Fixed FHA" (Texas promo page); DFW version 1.99 / 2.99 / 3.99 / 4.99 step | select homes | "Texas Summer" — dates not visible | S | | Brightland Homes | Brightland Mortgage | "up to $40,000 Flex Cash (closing costs / rate buydown / price reduction) + free move-in package + low fixed rates" | Brightland's "trusted lender" | not stated | S | | M/I Homes | M/I Financial | "QMI close by 9/30/26: 4.875% FHA (5.72% APR), 4.875% VA, 5.25% Conventional (5.66% APR)" + up to $10,000 closing credit | contracts on/after 07/15/26; loan app within 48 hrs | close by 09/30/26 — current | S | | LGI Homes | LGI Mortgage Solutions | general 2-1 and 3-2-1; builder-paid closing costs up to 6% of price | — | not stated | S | | Century Communities | not named | "$5,000 toward closing costs + fixed rate below 5%" + $2,000–$5,000 agent bonuses | close by 12/31/26 | — | S — Century bought Anglia Homes in 2024 | | Dream Finders | Jet Mortgage (builder-paid forward commitment) | "2/1 buydown: 3.49% Yr 1, 4.49% Yr 2, 5.49% Yr 3–30" (same as its Coventry brand) | government loans; primary residence | close by 09/30/26 — current | S | | KB Home | KBHS Home Loans | KB says publicly it "skips" broad buydowns; has a narrower "rate buydown contribution" | sign by 08/31/26; lock within 30 days | lapsed | S | | Westin Homes | not identified | no public offer found | — | — | S | | Drees Custom Homes | First Equity Mortgage | "QMI buydown 3.625% / 4.625% / 5.625% for contracts 9/1–9/30/26" + "50% off Design Center (up to $150k) + $10,000 closing costs" | non-contingent contract | contracts through 09/30/26, close by 10/31/26 — current | S | | Shea Homes | Shea Mortgage | "4.99% (5.273% APR)" or "$20,000 closing credit / 2-1 buydown 3.99–4.99–5.99" | Shea Mortgage | Houston presence not confirmed by the agent — verify | ? |

The Houston agent's report was cut off twice; 24 builders came through. Not chased further.

Austin and San Antonio — 30 builders

Builder Metro Lender tied to the offer Advertised offer (as read) Window Tag
D.R. Horton Austin DHI Mortgage "special interest rate combined with a temporary buydown," $6,518.20 incentive funds, 4.99% note rate, 0.375 pt required contracts 03/22–12/31/26, close by 01/31/27 S
D.R. Horton San Antonio DHI Mortgage $6,483.34 incentive funds toward a temporary buydown or closing costs not stated S
Lennar San Antonio Lennar Mortgage "72 Hour Flash Sale" FHA fixed rate; standing "2-1 Interest Rate Buydown" program flash sale closed 09/30/26 S
Lennar Austin Lennar Mortgage promo FHA 5/1 ARM and fixed rates on move-in-ready prior windows expired; Sept not confirmed S
KB Home Austin / SA KBHS Home Loans "Lowest Rates in Years" float-down; no current numeric rate found last confirmed 08/2024 S — stale
Pulte Austin Pulte Mortgage "up to 6% of sales price" toward price / buydown / closing; Pulte Mortgage does not publish rates online last window 07/31/25 S — stale
Taylor Morrison Austin TM Home Funding 2/1 and 3/2/1 buydowns advertised generally — S
Meritage San Antonio MTH Mortgage rate-lock + incentive package; 30-yr VA/FHA + Carefree Title 06/01–06/15/26 — lapsed S
Perry Homes Austin + SA Crestmark / Parkstone "Summer Sales Event 2026": up to $35,000 as a 4.99% (5.178% APR) buydown or flex cash summer; end date not stated S
David Weekley Austin Priority Home Mortgage Flex Dollars up to 10% of base price; prior "as low as 2.99%" flex window ended 06/30/26 S
David Weekley San Antonio Priority Home Mortgage "4.99% on select move-in ready" / FHA-VA 2.99% → 3.99% → 4.99% Nov–Dec 2025 — lapsed S
Highland Homes San Antonio Highland HomeLoans 1-1 buydown 5.25% yrs 1–2 then 4.5% (6.0% APR) or 5.5% (6.253% APR) 08/05–09/07/26 — lapsed S
Toll Brothers San Antonio preferred lender 2/1: 3.99% first year (6.04% APR), Regency at Esperanza 08/08–08/23/26 — lapsed S
Toll Brothers Austin preferred lender 2/1 program on quick move-ins; no rate confirmed — S
Ashton Woods San Antonio Highland HomeLoans same 1-1 as Highland 08/05–09/07/26 — lapsed S
Tri Pointe Austin in-house "rates as low as 4.99% plus paid closing costs" not stated S — via NewHomeSource
Chesmar Austin + SA not specified "Imagine Happier Bonus" — closing costs or buydown not stated S
Coventry (Dream Finders) Austin Jet Mortgage 2/1 forward commitment: 3.49% → 4.49% → 5.49%, government loans close by 09/30/26 — current S
Coventry (Dream Finders) San Antonio Jet Mortgage 5-yr FHA ARM, 3.99% for 5 years, "builder-paid forward commitment" close by 09/30/26 — current S
M/I Homes Austin M/I Financial "No Incentives are currently scheduled for this market" — S
M/I Homes San Antonio M/I Financial "Game Time" event; terms not on landing page 09/14–10/11/26 — current S
Sitterle San Antonio Smart Choice Mortgage 4.49% fixed (4.512% APR); 780 FICO, 20% down contract by 12/31/25 — stale page S
Beazer San Antonio Benchmark / Guild 2-1: 2.99% → 3.99% → 4.99% + 2.3% closing credit page dated 2024 — stale S
Pacesetter Austin SFMC Home Lending 4.99% FHA/VA/USDA; conventional as low as 5.5% 07/01–07/15/26 — lapsed S
CastleRock Austin + SA Cornerstone / Interlinc 4.99% 30-yr fixed OR 3.99% 1/1 buydown close by 12/31/25 — stale page S
Drees San Antonio First Equity Mortgage 3-2-1: 2.99% yr 1 (6.798% APR) FHA at Ventana / Haby Hill / Ladera contracts 08/01–08/31/26, close by 09/30/26 S
Drees Austin First Equity Mortgage "Fall Savings": rates starting at 4.49% (6.572% APR), conventional current seasonal page S
Empire Communities Austin + SA not specified "low rates and closing cost incentives" — S
Rausch Coleman San Antonio Lennar Mortgage acquired by Lennar Nov 2024; page redirects to Lennar's below-market-rate offer — S
Scott Felder · Brohn · Bloomfield · Century · LGI · Milestone · GFO · Brightland · Newmark · View · Bella Vista · Armadillo · Stylecraft Austin / SA — no public numeric offer found on the builder's own site — ?

What the roster says, read as a whole S

  • Nearly every builder ties the rate to its own lender. K. Hovnanian says it in numbers: use another lender and the incentive shrinks by 5% of price.
  • The advertised number is usually the year-one rate of a temporary buydown, not a 30-year rate. "3.99%" at Toll, Sandlin, Trophy, CB JENI and Coventry is year one of a 2/1 or 3/2/1. The permanent-rate offers on the list sit at 4.99% (David Weekley, Perry, Tri Pointe, First Texas, History Maker) and 4.49% (Sitterle, Drees Austin).
  • Two builders use the words "forward commitment" on their own promo page: Coventry Homes (all three metros) and DSLD (Houston). The rest call it a buydown.
  • Many pages are stale. A third of the rows carry contract windows that already closed. A builder's promo page is not evidence of a live offer; the sales office is.
  • Texas is where the incentives run hottest. Lennar's Texas region ran 16.9% of price in the first half of 2024, its highest (§4.5b). Realtor.com: 19.0% of Texas new-construction listings had a price cut in Q4 2025 (§8).

11. The rest of the toolbox — what builders give besides the rate

Ry asked: "is there anything else that builders do in order to give concessions?" Yes. The Texas roster in §10 is the evidence; every item below appears on at least one builder's live promo page read on 2026-09-16, and the tag is the roster's tag for that row.

Concession What it is Who is doing it (§10) Tag
Closing-cost credit A dollar amount toward the buyer's closing costs, usually capped as a % of price and tied to the affiliated lender D.R. Horton "$10,000 … closing costs (max 2% of price) w/ DHIM"; American Legend "$20K toward closing costs"; Lennar "up to $10,000"; M/I "up to $10,000"; Highland "$10,000 closing costs" S
Flex cash One pot the buyer can point at a buydown, closing costs, upgrades or a price cut First Texas "$30K Flex Cash"; Brightland "up to $40,000 Flex Cash"; Trophy "$80,000 Your Way"; Perry "$35,000 as low-rate buydown or flex cash"; Bloomfield "$15,000–$25,000 … rate points, design upgrades, or cash toward closing" P First Texas; S others
Design-center / upgrade credit Free or discounted options at the builder's design studio Highland Houston "50% off Design Center (up to $150k options)"; D.R. Horton Houston "up to $15,000 upgrades any lender" S
Move-in package Appliances and blinds included DSLD "free fridge"; Brightland "free move-in package (blinds + fridge)" S
Price cut on spec inventory An outright reduction, usually on finished "quick move-in" homes History Maker "up to $55,000 off"; Realtor.com: nearly one in five new listings cut in Q4 2025 (§8) P
Extended rate lock Builder pays for a long lock so the buyer's rate holds through construction Taylor Morrison "9-mo extended lock" S
ARM promo A 5/1 adjustable at a low start rate, builder-paid Coventry San Antonio "5-yr FHA ARM, 3.99% initial rate"; Lennar Austin "promotional FHA 5/1 ARM" S
Agent bonus (BTSA) Cash to the buyer's agent for bringing a buyer, on top of commission Century Communities "BTSA credits $2,000–$5,000"; History Maker "hero discounts" S
"Any lender" vs "our lender" split A smaller credit if the buyer brings an outside lender, a larger one with the affiliate D.R. Horton Houston "$15,000 upgrades any lender OR $10,000 closing costs w/ DHIM"; K. Hovnanian: incentive cut 5% of price without KHAM S
Forward-commitment rate The wholesale block, §2 Coventry, DSLD name it; everyone else calls it a buydown S

The two things the builders' own filings say about the mix P

  • They are bundled and reported as one number. Lennar's CFO confirmed on the Q2 2026 call that the 12.9% "incentive" figure "does include" base-price adjustments, not buydowns alone (§4.4). PulteGroup's Q2 2026 10-Q lists three tools in one sentence: "discounts on spec inventory (houses without customer orders), closing cost incentives, and mortgage interest rate buydowns" (§4.8).
  • The rate is the one they lead with. Century Communities: "buydowns continue to be the most important incentive" S. D.R. Horton, on why: "the most successful incentive we have seen has been to impact that monthly cost of homeownership through some form of rate buy down" (§4.3). NAHB's August 2026 survey: 63% of builders using incentives, 35% cutting prices outright (§8).

Why the incentive beats the price cut, from the builder's side P

Guaranteed Rate's pitch to builders (§2): "Instead of reducing the price of the house, borrowers can take on a lower monthly mortgage payment by lowering the rate… by maintaining initial asking prices, builders can…" AEI's reading (§6): the buydown "enabled the largest builders to avoid a 10–12% price cut." A price cut on one house reprices every unsold house in the subdivision and every comp the appraiser will pull. A credit does not.

Teaching line: Builders have a whole shelf: closing costs, flex cash, free fridges, design-center credits, agent bonuses, long rate locks, ARM promos. They reach for the rate first because it moves the monthly payment most. They reach for the price last because it moves the comps.

What was not found ?

No survey ranks concession types by share of builders using each — NAHB's public releases give one blended "incentives" number. No builder discloses the dollar split between buydowns, closing costs and upgrades. A fourth sonnet agent was sent for exactly this after the session's search budget was gone; if it reports, the finding goes here.

Not covered ? — do not air

  • Any DFW-only dollar total for builder buydown spend. Not found. (Lennar's Texas region, §4.5b, is the closest thing.)
  • Taylor Morrison "28% in Q4 2023." Did not confirm.
  • Whether new-build resales actually underperform. Forecast only (§6).
  • A per-builder closings ranking for any Texas metro (Zonda Local Leaders is paywalled). §10 uses permits instead.

Method, and what it cost

  • Session 1 (2026-09-16): three Opus agents, one angle each (mechanism / hard numbers / skeptic), returned chat answers with source lists in about two minutes. Then twenty-six curl fetches of the primaries they named — SEC EDGAR (D.R. Horton 10-K, Lennar 8-K via the EDGAR full-text search API), two Fannie Mae Selling Guide pages, the Federal Register, AEI, JBREC, NAHB, HousingWire, NAR, Benesch, two Motley Fool transcripts. Thirteen of fourteen returned 200. Every P above is a grep hit in one of those files.
  • The lesson, again: the agents were worth it for the angles and the URLs. The tags came from the fetches.

Open questions worth chasing

  1. Pull Lennar's Q2 2024 and Q2 2025 10-Qs to move §4.5 and §4.5b to P — the Texas 16.9% line deserves the primary.
  2. A DFW builder's actual closing disclosure showing SFC 887 — the only way to see the mechanism on one real loan.
  3. Meritage Q1 2025 release: the write-off on expired buydowns is the small-builder version of Horton's $65M.