Rate Buydowns & Interest Reserves—When They Help Your Appraisal (and When They Don’t)
Investors love two levers that make deals pencil: rate buydowns (pay points to lower the interest rate) and interest reserves (capitalized interest to cover payments during rehab/lease-up). Both can improve financing and cash flow—but they almost never raise the appraised value. Here’s how to use them smartly. Appraisal ≠ Underwriting. Appraisers value property; lenders underwrite … Rate Buydowns & Interest Reserves—When They Help Your Appraisal (and When They Don’t)