Final answer:
Yes, the FHA mandates that buyers must qualify for a mortgage at the note rate rather than the buydown rate. Homebuyers may face stricter qualification criteria when applying for a mortgage.
Step-by-step explanation:
Yes, the Federal Housing Administration (FHA) mandates that buyers must qualify for a mortgage at the note rate rather than the buydown rate. The note rate is the actual interest rate specified in the mortgage contract, while the buydown rate is a temporarily reduced interest rate that is usually offered for a certain period of time at the beginning of the mortgage term.
The implication of this requirement for homebuyers is that they need to meet the higher note rate qualification criteria, which may include stricter income and credit score requirements, potentially making it more difficult for some buyers to qualify for a mortgage.