What are temporary buydown limits?

Temporary buydown limits are new rules from Ginnie Mae that restrict how many buydown loans can go into a Multiple Issuer Pool (MIP). Starting May 19, 2025, only 10% of the pool can be buydowns.

Why can’t every loan use a temporary buydown?

Because Ginnie Mae enforces the temporary buydown limits in MIPs. If more than 10% of the loans are buydowns, the pool is rejected.

How long will the temporary buydown limits last?

The 10% cap is temporary. Ginnie Mae expects it to last six to nine months while they review and update guidance.

Are there exceptions to the temporary buydown limits?

Yes. In Custom Single-Family Pools (C SF), there is no limit on buydown loans. But custom pools take extra planning and may not work in every case.

What if a borrower has lower credit or special circumstances?

Some borrowers, like many VA buyers, may need loans placed directly into Ginnie Mae pools. This can affect whether a buydown can be offered, even if the buyer qualifies in other ways.

What are alternatives if a temporary buydown isn’t available?

Alternatives include permanent rate buydowns, closing cost credits, or paying off debts to improve the monthly budget.

Temporary Buydown Limits

Temporary Buydown Limits: What Realtors and Builders Need to Know

Temporary buydowns are a tool that can make a new home more affordable. They work by lowering the monthly payment for the first year or two, then the payment goes back up to the regular amount. Many buyers, Realtors, and builders like using buydowns because they give families breathing room when moving into a new home. But here’s the truth: not every loan can use a buydown.

What Changed with Ginnie Mae

Ginnie Mae is the government agency that helps lenders sell VA, FHA, and USDA loans to investors. On May 19, 2025, Ginnie Mae put out new rules (called APM 25-02) that limit how many buydown loans can be grouped together in one “pool.”

Here’s what that means:

Only 10% of the pool can be buydown loans.
Another 10% limit applies to high-balance loans.
If a loan is both high-balance and a buydown, it counts in both buckets.

If a pool has more than that, the system automatically rejects it. Lenders can’t get around it.

Why Did They Make This Rule?

Investors who buy these loan pools want steady payments. Buydowns lower the payment for the first year or two, which changes the flow of money at the start. If too many loans in a pool are buydowns, the investors worry about getting paid back the way they expect. To calm those fears, Ginnie Mae set the 10% limit. This rule is temporary and is expected to last six to nine months while they study the issue further.

Good News: Custom Pools

On June 16, 2025, Ginnie Mae made another change with APM 25-03. They said that in a different type of pool, called a Custom Single-Family Pool (C SF), there is no 10% limit on buydowns. This gives lenders more flexibility. But custom pools take extra planning, so they are not always the right fit for every loan.

How This Impacts Borrowers

Not every buyer will see the same options. Some borrowers, like many using VA loans, may have lower credit scores or special situations that investors see as higher risk. Those loans often go directly into Ginnie Mae pools instead of being mixed in with others. That can change whether a temporary buydown is available.

This doesn’t mean the borrower did anything wrong. It just means the way the loan is sold behind the scenes can affect whether a buydown can be offered.

What Realtors and Builders Should Know

If you’re writing offers or planning incentives, keep this in mind:

Buydowns are still possible, but not on every loan.
The 10% rule may block a buydown even if the buyer qualifies.
Custom pools can allow more buydowns, but they are not always practical.

Example

Think of a pool like a basket of 100 apples. Only 10 of those apples can be buydowns. If you try to add 20 buydowns, the basket tips over and gets sent back. The lender has to either use a custom basket (custom pool) or change how the credits are used.

Other Ways to Help Buyers

If a temporary buydown can’t be used, credits can still help buyers in other smart ways:

Permanent rate buydown (lower the rate for the life of the loan)
Closing cost credit (reduce cash to close)
Debt payoff (use funds to pay off a car loan or credit card to improve the monthly budget)

Quick Reference

Pool Type	Limit on Buydowns	What It Means
Multiple Issuer Pool (MIP / M SF)	10% limit	If more than 10% of the loans are buydowns, the pool is rejected.
Custom Pool (C SF)	No limit	Buydowns can be used freely, but setup takes more planning.

Loan Options We Offer

Our team looks at every angle to match the right program with each buyer. Here are some of the programs we work with:

Next Steps

Buydowns are still a great tool when they fit, but they’re not one-size-fits-all. If you’re a Realtor or builder planning to use buydowns, let us review the details early so we can confirm if it will work—or show you smart alternatives that achieve the same goal.

Start Your Pre-Qualification

Disclaimer: Guidelines and rules are subject to change. This information is for educational purposes only. Always confirm details with your lender before finalizing a contract or offer.

J.D. Peck