Buydowns are easy to understand if you consider them a mortgage subsidy made to the homebuyer on behalf of the seller. Typically, the seller contributes funds to an escrow account that subsidizes the loan during the first years, resulting in a lower monthly payment for the homebuyer. This lower payment allows the homebuyer to qualify more easily for the mortgage.
Most buydowns last for a period of one to five years, and the mortgage payments increase once the buydown expires.
Финансовый словарь Финам.
• Mortgage subsidy