Cover your closing costs and prepaids first. That part of the credit is a dollar-for-dollar win, and everything after it is a real decision. With the remainder, the options are a temporary buydown, a permanent buydown (points), or a lower purchase price. The trade-offs: - A permanent buydown lowers the rate and payment for the life of the loan, and it only pays off if you keep the loan past the break-even point. We lean against paying points as a default, so make the builder's math prove itself. - A temporary buydown drops the payment for the first year or two, but you still qualify at the full note rate. It helps early cash flow; it does nothing for long-run affordability. - A lower purchase price can mean lower property taxes (they are often based on what you pay) and a smaller loan, though your rate stays higher unless you also fund a buydown. Remember what the credit is: money the builder built into the price you are paying, handed back with strings. Treating it as free money is how buyers overpay for the house. Two practical notes from doing this on new construction. Most people live in the payment, whatever they say up front, so if a lower payment is what lets you sleep at night, directing the credit at the rate can be a sound informed choice. And builders usually will not cut the sticker price, because a visible price drop angers recent buyers and undercuts the rest of the community; they hand out rate and closing-cost help instead, and cut price only to move a specific stubborn home. Which split wins comes down to how long you plan to keep the loan. That break-even comparison is something plenty of people want to see, and it is exactly what we run with you on the free Roadmap conversation.