FHA 2/1 Buy Down Program

[Courtney Edwards]

Can anyone familiar with FHA 2/1 Buy Down Program shed a little light. From my understanding its a loan that allows you to buy down your interest rate for the first two years of your mortgage. The third year your mortgage rate returns to the fixed interest rate that you obtained at the beginning of the loan. My assumption (which could be what is causing my confusion) is that a homebuyer who is seeking a lower monthly payment for two years is doing so due to financial constraints and needs time to adjust to a mortgage payment and the expenses that come with owning a home. Does that type of homebuyer have the upfront money to buy down the interest as well as cover the other expenses of purchasing a home (downpayment, inspection, attorneys fees, etc.)?