You’ve heard about 3/2/1 buydowns and interest-only options — but if you’re looking at a jumbo loan over $1.2M, you may have been told these programs don’t exist. Here’s the real story.
Why Jumbo Buydowns Are Harder to Find
Most jumbo loans are portfolio products — lenders hold them in-house rather than selling to Fannie Mae. Each portfolio lender sets its own rules, and many have simply chosen not to offer buydown structures on jumbo loans due to: complexity of pricing the buydown into a non-agency product; lack of seller concession standardization above conforming limits; liability concerns around qualifying borrowers at temporary rates vs. note rates.
What Lenders Will Do
Some jumbo lenders do offer 2/1 buydowns (not 3/2/1). Lender-paid rate reductions in exchange for origination fee are available at some portfolio lenders. Temporary rate locks with float-down provisions offer some of the same benefits. ARM jumbo loans provide a lower initial rate without buydown structure.
The Workaround: Seller Concessions + Points
Even without a formal buydown program, a seller can provide concessions (typically up to 3% on conforming-jumbo loans) that you use to buy discount points — reducing your permanent interest rate rather than temporarily. On a $2M loan, 2 points = $40,000 in seller concessions buying down your rate by 0.375–0.5% for the life of the loan. This often beats a 3/2/1 buydown mathematically if you plan to stay 5+ years.
Marin County Jumbo Market Reality
In Marin County’s luxury market ($1.5M–$6M), seller concessions are negotiable but less common in competitive multiple-offer situations. Buydown strategies work best when you have negotiating leverage — buying an estate property, older listing, or off-market deal where the seller has flexibility on terms.
Considering a buydown in Marin County or the Bay Area? Call DiVita Home Finance at (800) 239-1108 or schedule a free consultation — we’ll run the numbers for your specific scenario.
