Product decisions / 04
Design to a payment.
See the home price and land allowance a monthly budget could support. Then refine the details.
YOUR BUYER / YOUR BUILD
Editable example assumptions, not a lender offer. Includes entered taxes, insurance, HOA and PMI.
Tax, insurance, loan term & project costs
01 / Buyer budget
The rest of the monthly payment
02 / Shared project costs
Connect affordability to development
These costs update your shared project. The model also uses land, soft costs, permits, contingency, selling fees, duration and financing from the full feasibility model. Buyer scenarios do not overwrite its saved selling price.
Land entered: $400,000. Selling costs: 5.0% of revenue. An additional closing credit below is treated as an extra builder expense at closing.
Monthly budget, component by component
| Principal & interest | Property tax | Insurance | HOA | PMI | Total |
|---|---|---|---|---|---|
| $2,317 | $458 | $150 | $75 | $0 | $3,000 |
03 / Incentive lab
Compare the payment relief and the builder’s cost
This comparison uses the explicit sale price below. A lower price reduces revenue and selling fees; it is not charged again as an incentive expense. A closing credit does not reduce the note rate or monthly payment.
| Option | Sale price | Year 1 / month | Year 2 / month | Year 3 / month | Note rate |
|---|---|---|---|---|---|
| Reference sale | $450,000 | $2,950 | $2,950 | $2,950 | 6.5% |
| Price reduction | $435,000 | $2,860 | $2,860 | $2,860 | 6.5% |
| Quoted permanent buydown | $450,000 | $2,776 | $2,776 | $2,776 | 5.8% |
| Temporary 2–1 buydown | $450,000 | $2,499 | $2,719 | $2,950 | 6.5% |
| Option | Lost gross revenue / home | Cash incentives / home | Project profit | Project margin | Total land ceiling |
|---|---|---|---|---|---|
| Reference sale | $0 | $0 | -$44,598 | -1.0% | Target infeasible at zero land |
| Price reduction | $15,000 | $0 | -$187,098 | -4.3% | Target infeasible at zero land |
| Quoted permanent buydown | $0 | $12,000 | -$164,598 | -3.7% | Target infeasible at zero land |
| Temporary 2–1 buydown | $0 | $8,193 | -$126,531 | -2.8% | Target infeasible at zero land |
The temporary 2–1 subsidy is $8,193 per home before the additional closing credit: 12 months of year-one principal-and-interest relief plus 12 months of year-two relief. Year one uses the note rate minus 2 percentage points, year two minus 1, each floored at zero. The loan itself remains at the reference note rate and the year-three payment returns to that rate.
Formulas, timing and limits
The annuity payment is loan principal × r ÷ [1 − (1 + r)⁻ⁿ], where r is the monthly note rate and n is the number of payments. At zero interest it is principal ÷ n. The house-price ceiling solves the full monthly payment equation, including sale-price-based property tax and initial-loan-based PMI.
Construction costs and financing use the shared project model. Incentive cash and closing credits are paid from closing proceeds. They reduce profit and the land ceiling once; extra borrowing, financing charges on incentives and lender credit limits are not assumed. Down payment is the same percentage of each option's sale price.
The temporary buydown is a payment subsidy, not a lower contractual note rate or an affordability qualification. Actual lender program terms must be checked. Insurance, taxes, HOA and PMI can change; the table holds them fixed and does not model PMI cancellation. A monthly-payment ceiling also ignores the buyer's available equity, other debts and preferences.
Your project inputs stay in this browser unless you explicitly export or share them. Public source requests do not include your budgets.