Why Most Lenders Won’t Do a 3/2/1 Jumbo Buydown — And We Will

I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. Jumbo buydowns come up often in the Bay Area — here’s the honest picture of what lenders will and won’t do above the conforming limit. Call (800) 239-1103.

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. Most of the time, that’s true. Here’s why, and what actually works instead.

Why Jumbo Buydowns Are Harder to Find

Most jumbo loans are portfolio products — lenders hold them in-house rather than selling to Fannie Mae or Freddie Mac. Each portfolio lender sets its own rules, and many have chosen not to offer formal buydown structures on jumbo loans for three reasons:

• Pricing complexity: The buydown subsidy has to be priced into a non-agency product where margin assumptions are different than conforming loans
• Seller concession inconsistency: Above the conforming limit, seller concession structures aren’t standardized the way they are on Fannie/Freddie loans
• Qualification rules: Even where buydown programs exist, lenders must qualify the borrower at the fully-indexed note rate — which limits the value of the temporary reduction as a qualification tool

What Jumbo Lenders Will Actually Do

Some portfolio jumbo lenders offer a 2/1 buydown (not 3/2/1). Others allow lender-paid rate reductions in exchange for origination fees. ARM jumbo loans provide a lower initial rate without any buydown structure at all — on a 7/1 ARM, that built-in initial rate reduction is often more valuable than a temporary buydown would be.

The 10/1 ARM is worth a specific mention for Bay Area jumbo buyers. In the current rate environment, the 10/1 ARM can run 0.375–0.625% below a 30-year fixed on a $2M loan — that’s $375–$625/month in savings with a 10-year fixed period. For a buyer who realistically expects to sell or refinance within 10 years (which describes most Marin County luxury buyers), this beats a 3/2/1 buydown structurally.

The Workaround That Actually Works: Seller Concessions + Discount Points

Even without a formal buydown program, a seller can provide concessions that you use to buy permanent discount points — reducing your rate for the life of the loan rather than temporarily.

On a $2M loan at 6.875%, buying two discount points ($40,000 in seller concessions) can reduce the rate to approximately 6.375%. That’s $669/month in savings — permanently, not just for three years. If you stay 5+ years, this almost always beats a 3/2/1 buydown mathematically.

Conforming-jumbo loans (up to $1,209,750 in high-cost California counties) typically allow seller concessions up to 3% of purchase price. On a $1.4M purchase with 20% down, that’s up to $42,000 available for points or other closing costs.

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, an older listing, or an off-market deal where the seller has flexibility on terms.

In 2026, as inventory has increased modestly from 2022 lows, more Marin sellers are open to creative concession structures. The key is having a lender who can model the actual numbers — break-even analysis, monthly payment comparison, total interest cost — before you negotiate.