San Antonio Builder Incentives, Decoded: 4.99% Fixed vs. 3.49% Buydown vs. $10K Closing Costs

Patriot Nation, if you have looked at a new home in San Antonio this fall, you have seen the billboards: 3.49% this year, 4.99% fixed, $10,000 in closing costs. Those numbers are real, but they are not comparable, and buyers who take the first pretty number without reading the structure are the ones who get surprised at year three. This article decodes each type of builder incentive, shows you what it actually costs, and explains why you should talk to a buyer's agent before you ever sign a guest card.

Why Builders Are Offering Big Incentives While Rates Are Over 7%

Mortgage rates just hit a one-year high. Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed average at 7.03% for the week of September 24, 2026, up from 6.95% the week before and 6.30% a year earlier. See the Freddie Mac PMMS data here.

Higher rates slow sales, and builders would rather buy the rate down than cut the price. A price cut on one home drags down appraisals across the whole community, which hurts every lot they can still sell. An incentive, by contrast, is a financing tool aimed at one buyer and one contract, so builders push them hard instead.

Timing matters too. Builders push hardest in the fourth quarter: D.R. Horton's fiscal year ends September 30, and Perry runs a Year End Sales Event. That is a good time to buy, and also a high-pressure time at the sales desk. The pressure is exactly why you want your own representation before you walk in.

Watch Patrick's newest video, 2 Reasons First-Time Home Buyers Are Choosing New Builds Right Now, for why first-time buyers are choosing new builds and how to negotiate them.

The 4 Types of Builder Incentives (and What Each Really Costs)

Every offer falls into one of four buckets. Each one changes your payment, your cash to close, or both. Each row below carries its verified date, because every one of these offers changes weekly.

1. Permanent Rate Buydown

The builder pays points to lower the rate for the entire loan. Example: Perry Homes advertises a 4.99% 30-year fixed rate (5.178% APR) bought down with points through Crestmark or Parkstone Mortgage.

The catch: the incentive budget goes to points, so you usually give up flex cash, and the headline rate is only available with the builder's financing. Confirm the APR and the points on the Loan Estimate, because the APR is the number that reflects the true cost.

Best for: buyers who plan to stay long term and want a payment that never steps up.

Perry Homes offer verified Sept 29, 2026 on perryhomes.com (Summer Sales Event 2026, San Antonio page). Financing through Crestmark Mortgage Company or Parkstone Mortgage.

2. Temporary 2-1 Buydown

The rate is lowered for the first two years, then steps up. Example: Coventry Homes has advertised a 2-1 buydown at 3.49% year 1, 4.49% year 2, 5.49% after (APR 6.281%) through Jet HomeLoans.

The catch: the payment rises for two straight years. Coventry's own example shows about $466 more per month by year 3, and that step-up hits right when your other costs are settling in.

Best for: buyers who expect income to grow in the first few years.

Coventry 2-1 buydown example advertised late September 2026; the current San Antonio Sales Event (verified Sept 29, 2026 on coventryhomes.com/san-antonio/sales-event-listing/) now advertises low rates from 3.99%. Confirm the current structure in writing before you rely on a teaser rate.

3. Adjustable-Rate Teaser

A low rate locked for a set number of years, then adjustable. Example: Lennar has run promotional FHA 5/1 ARMs at 3.375% (APR about 6.8%) through Lennar Mortgage.

The catch: the rate is fixed for 5 years, then it adjusts. The APR tells the real story on an ARM, because it spreads the adjustment risk over the loan term. On the illustrative comparison below you will see a 5/1 ARM at 3.375% reset to a payment near $2,700 at year six.

Best for: buyers who know they will sell or refinance within 5 years.

Lennar San Antonio offers verified Sept 29, 2026. The current Fall Super Sale promo runs through Lennar Mortgage; 2026 San Antonio promos have advertised FHA fixed rates from 3.75% (4.587% APR) to 4.25% (5.391% APR) plus price reductions up to $25,000. Confirm the current rate sheet on the live promo page.

4. Closing-Cost Credits and Flex Cash

Cash applied to your closing costs, or flexible cash from the builder. Current examples: D.R. Horton up to $8,000 in closing costs through DHI Mortgage, Meritage up to $10,000 through MTH Mortgage, and Perry up to $35,000 in flex cash on its Summer Sales Event.

The catch: you pay the full market rate. The credit is real money, but it is a one-time amount, while a buydown saves you money every month for years.

Best for: buyers who are short on cash to close.

Offers verified Sept 29, 2026: D.R. Horton San Antonio pages (special pricing and up to $8,000 in closing costs with DHI Mortgage through December 31, 2026), meritagehomes.com/state/tx/san-antonio (Get Moving Sales Event), perryhomes.com (Summer Sales Event 2026). All require the builder's affiliated lender.

Side by Side: One $450,000 Home, Four Different Deals

This is the comparison that matters. Same home, same loan amount, four different incentive structures. The table is labeled the way every honest comparison should be:

Assumptions: $450,000 price, 5% down, $427,500 loan, 30-year term, principal and interest only (no taxes, insurance, mortgage insurance, or HOA). Market rate 7.03% (Freddie Mac PMMS, week of September 24, 2026). ARM assumed to reset to 7.00% in year 6 for illustration.

The Preferred-Lender Catch

Nearly every incentive requires the builder's affiliated lender, and often their title company. You cannot be forced to use their lender to buy the home, but you usually lose the incentive if you don't.

Here is the honest part: sometimes the builder's lender is the best deal. Sometimes the "special rate" comes with higher fees or points that eat the savings. The only way to know is to compare Loan Estimates line by line: rate, APR, points, lender fees, and total cash to close. The builder's lender can quote a great rate and still lose on points; your lender can quote a higher rate and win on credits. The label on the door never decides the winner, the numbers do.

Want the full comparison framework? See how Patrick compares the builder lender vs an outside lender on the New Construction hub, or read the builder's lender vs your own lender article.

Builder Incentives by Area (Fall 2026)

Incentives vary by corridor because the builders and the inventory differ. Every row below was verified from the builder's own site on Sept 29, 2026, and every offer can change before the end of the week. Rates shown always carry their APR and key assumptions.

Far West and Northwest San Antonio

The most builder-dense corridor in the metro: Stillwater Ranch, Nopal Valley, Davis Ranch, Ladera, Summerlin, Thomas Pond, Sagebrooke, Kallison Ranch, Briggs Ranch, and Hunters Ranch. Most builders, most move-in-ready homes. See the full Far West corridor guide.

Schertz and Cibolo

The I-35 northeast corridor that serves JBSA-Randolph and many VA buyers: Homestead, The Parklands, Foxbrook, Legendary Trails, Rhine Valley, The Crossvine, and Saddlebrook Ranch. See the full Schertz and Cibolo corridor guide.

New Braunfels, Seguin and Marion

The widest price range in the metro: Mayfair, Veramendi, Meyer Ranch, Sunflower Ridge, Kyndwood, Steelwood Trails, Navarro Ranch, and Grace Valley. See the full New Braunfels and Seguin corridor guide.

Bulverde, Spring Branch and Boerne

Up US-281 and I-10 West the market is mostly custom and semi-custom, so rate promotions are fewer and the incentives are quieter. The exceptions worth naming: Perry at Johnson Ranch and Kinder Ranch in the Spring Branch and Bulverde area, and Meritage at Fox Falls in Boerne. If a builder here is showing a rate promotion, it is usually tied to one phase or a handful of inventory homes. See the Bulverde and Spring Branch guide and the Boerne and Fair Oaks Ranch guide.

VA and FHA Buyers: How Incentives Stack

Builder incentives are still available on government loans, but each program caps what the builder can contribute. Two numbers matter:

• FHA caps seller and builder contributions at 6% of the purchase price. That 6% has to cover the buydown, prepaids, and closing costs together, so a big incentive package can hit the cap quickly.
• VA lets the seller pay normal closing costs, plus up to 4% in concessions for other items. Normal closing costs such as VA-approved fees and discount points are treated separately from additional concessions such as a rate buydown, so the two categories follow different limits. Patrick confirms the exact split on every VA quote before anything is signed.

If you are moving on orders near JBSA, the timing works the same way: incentives sit on top of the financing, but the cap is real, and a quick move-in home often carries the biggest credit because the builder wants it gone. See VA loans for new construction and the PCS to JBSA San Antonio guide for the move-date math.

What You Can Negotiate Beyond the Advertised Offer

The advertised incentive is the starting point, not the ceiling. Lot premiums, design center credits and upgrade pricing, the closing date, and extra incentives on move-in-ready homes that have been sitting are all on the table, and none of them show up in the billboard.

The design center is where buyers overspend, because the markup lives in the options, not the base price. Your agent can push back on upgrade pricing and ask for the allowance or the credit instead of the retail product.

And remember: the builder contract is written by the builder's attorneys. Your agent reviews it with you before you sign. See what to watch in the 5 contract terms buyers should never agree to.

Don't Sign With a Builder Until We Talk (The First-Visit Rule)

The sales rep works for the builder. They're friendly and helpful, but they don't represent you, and they can't give you advice the way your agent can.

Most builders only recognize your agent if the agent is with you, or registers you, on your first visit. Walk in alone and sign the guest card, and you may lose the ability to have your own agent with that builder. That one signature often decides who represents you for the whole deal.

Already visited? Call Patrick anyway. If you haven't signed a contract, there may still be options, and it costs nothing to check.

In most cases the builder pays the buyer's agent commission at closing, so the buyer pays nothing out of pocket. You are not choosing between an agent and a discount; you are choosing whether someone on your side reviews the numbers.

Frequently Asked Questions

Patrick Kevin Fagan

Texas Real Estate Sales Agent #454749, AXEN Realty LLC · Senior Loan Officer, NMLS ID #877741, NEXA Mortgage, LLC (NMLS #1660690)

Patrick Kevin Fagan is a dual-licensed REALTOR and mortgage loan officer with 23+ years in loan origination and 19 years in real estate, helping first-time homebuyers, growing families, sellers, and investors across Greater San Antonio and the Texas Hill Country. He educates buyers on YouTube so they can lower their rate, minimize cash to close, and use down payment assistance programs.

210-317-6514 pfagan@nexalending.com Book a Call YouTube

Equal Housing Opportunity

Patrick Kevin Fagan, NMLS ID #877741 · NEXA Mortgage, LLC, NMLS #1660690 · Texas Real Estate Sales Agent #454749, AXEN Realty LLC, 1399 Frontier, Spring Branch, TX 78070.

Rates, APRs, and incentives in this article were advertised by the builders as of September 29, 2026, and change without notice. Every rate shown includes its advertised APR and key assumptions where the builder published them. Payment examples are illustrative, principal and interest only, and are not loan offers. Mortgage originations are available statewide across Texas; real estate services are provided in Greater San Antonio and the Texas Hill Country. The Texas Real Estate Commission Consumer Protection Notice and Information About Brokerage Services links are in the site footer.

This page was updated Updated September 29, 2026. Incentive tables are refreshed at least monthly and at every quarter end.