Our generic Buydown Agreement (Cx25) is formulated to comply with the buydown requirements of various GSE’s and Federal agencies, including the following:
- FNMA (see FNMA 2016 Selling Guide B2-1.03-05)
- FHLMC (see Freddie Mac Single-Family Seller/Servicer Guide ch. 4204.4)
- FHA (see FHA Single Family Handbook 4000.1 Pt. II, A.6.a[ix])
- VA (see VA Lender’s Handbook ch. 7, 9.e)
- RD (see HB-1-3555 ch. 11.5)
Upon reviewing these requirements, we have decided to add an additional sentence to Cx25 to clarify when buydown funds will be applied to the account. This language will be added to the end of the fourth paragraph and will state the following:
“The buydown funds will be automatically applied during each payment period to reduce the periodic payment of principal and interest to the extent provided for in this agreement.”
This change will take effect on January 27th, 2017. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 216896