Two Katy homes can have the same list price and still cost a buyer very different amounts each month. The difference often comes from a line in the purchase contract that says how much the seller will put toward the buyer's loan. Federal lending rules cap that line item, and the cap usually comes as a surprise to buyers.
On October 8, 2026, Freddie Mac's weekly survey put the average 30-year fixed rate at 7.40%. The week before it was 7.28%, and a year earlier it was 6.30%. Builders in Katy's master-planned communities are advertising rates well below that. Because of the rate gap, a new build and a resale home at the same price can carry very different monthly payments. Once you see that, the main question is how much rate each seller is allowed to buy for you.
The gap the builders are advertising
Elyson and Sunterra show the pattern clearly. Here are the offers posted this fall:
| Builder and community | Advertised offer | Fine print | Gap vs. 7.40% average |
|---|---|---|---|
| Perry Homes at Elyson | Up to $55,000 in flex cash plus a 4.99% 30-year fixed, 5.178% APR | Select homes, new contracts, must close by 12/31/26 | 2.41 points |
| Newmark Homes at Elyson | 5.49% fixed rate | Terms as of September 28, 2026; Cornerstone Mortgage Providers required; primary residence; close by November 30, 2026 | 1.91 points |
| Ashton Woods, Houston division incl. Sunterra | Up to $90,000 "Use as you choose" | Can go toward closing costs, structural options, studio allowance, lot premiums or interest rate; Sunterra labeled "Final Opportunity" | Depends on how it is used |
The Newmark offer is attached to real inventory. A move-in-ready home at 7431 Birch Thistle Lane in Elyson is listed at $483,460 and marked eligible for the 5.49% rate. At Sunterra, Ashton Woods' site shows a 4-bedroom, 2,900-square-foot Aubrey plan at 27106 Talora Lake Drive with $750,800 struck through and $549,990 marked "Price Reduced." The page gives no dates, so treat it as a displayed markdown, not a confirmed cut in the sale price.
A rate almost two and a half points under the market average changes what a buyer can afford more than most negotiated price cuts. That is the reason the builders lead with the rate.
Why Katy resale sellers are now in the same contest
Builders are running these offers because resale supply is catching up with them. In September 2026, the Houston Association of Realtors reported 4.9 months of inventory in the Katy–Southwest market area, with listings up 12.1% from a year earlier. Homes averaged 39.1 days on market, and the median sold price was $555,685. HAR describes that as a balanced market. Its snapshot doesn't break out resale from new construction, so the median includes both.
The wider region is moving more slowly. In August 2026, Greater Houston had 38,947 active single-family listings and 5.3 months of supply. Days on market averaged 54, up from 52 a year earlier, and the median price for existing homes fell 2.9% year over year to $330,000.
National builders are tracking the same trend. Leadership on Lennar's third-quarter 2026 earnings call, as transcribed by The Motley Fool, said resale supply in Texas and Florida is "particularly high." They also said:
"When a resale seller cuts price, they are competing directly for our customer, and we respond, which is a meaningful part of the incentive and pricing dynamic you see in our South Central and Southeast markets."
Buyers are comparing the two as well. In July, CNBC reported that budget-conscious first-time buyers in Houston are shopping resale and new construction side by side. Many new-home deals farther from downtown offer lower payments and a structural warranty.
So a Katy resale seller who wants to compete has a tool other than the asking price. They can pay toward the buyer's rate. That is where the caps come in.
What any seller is allowed to put toward your loan
Federal agencies cap "interested party contributions," the money a seller puts toward a buyer's closing costs, points or buydown. The caps cover resale sellers and builders alike. As of this month they work like this:
- Conventional loans backed by Fannie Mae or Freddie Mac, primary residence. The cap is 3% of value if your loan-to-value ratio is above 90%, 6% between 75.01% and 90%, and 9% at 75% or below. Fannie Mae's guide calculates the percentage on the lower of the sales price or the appraised value, not the loan amount. Freddie Mac uses the same tiers.
- FHA loans. Interested parties can contribute up to 6% of the sales price, and permanent and temporary rate buydowns count toward that 6% according to HUD's Handbook 4000.1.
- VA loans. VA puts no limit on seller credits for normal loan closing costs. A separate 4% ceiling, based on the home's reasonable value, applies to concessions such as paying the funding fee or prepaying hazard insurance. A temporary buydown paid by a seller or builder also counts against the 4%.
Here is how that works on the Newmark home at 7431 Birch Thistle Lane, assuming it appraises at its $483,460 list price. A conventional buyer at the 3% tier could receive about $14,504 in seller contributions. At the 6% tier it would be about $29,008, and at 9% about $43,511. Fannie Mae also requires financing concessions to be no larger than the borrower's actual closing costs. Any amount above that limit, or above the cap, becomes a "sales concession," which is subtracted from the sales price before the loan-to-value ratio is recalculated.
For the buyer, that means an "up to" figure in a builder ad isn't the amount that reaches the loan. The loan-to-value tier sets the ceiling, and that ceiling is the same whether the seller is a national builder or a Katy family moving across town.
The builder's lender counts as a seller too
Many builder rate offers require you to use a specific lender. Newmark's 5.49% requires Cornerstone Mortgage Providers. Under Fannie Mae's guide, a lender is not an interested party unless it is the seller or is affiliated with the seller or another interested party. If it is affiliated, its lender incentives are classed as sales concessions and are subtracted from the sales price for loan-to-value purposes. Whether a particular required lender is affiliated with a particular builder is a question for the disclosures, not something to assume.
Those disclosures are required by law. Under RESPA's affiliated business rules, the ownership or financial relationship and the estimated charges must be disclosed in writing. The CFPB says a lender may generally offer an incentive for doing business with it. The CFPB's consumer guidance on points and lender credits recommends comparing offers with the same points, credits and loan terms.
Not every buydown lasts the life of the loan
The term "buydown" covers two different products, and they change your payment very differently.
- Permanent buydown. You pay discount points at closing to get a lower rate for the full term. The CFPB describes this as trading higher closing costs for a lower interest rate.
- Temporary buydown. Money held in escrow lowers your payments for a limited time. VA's 2-1 example sets payments 2 points below the note rate in year one, 1 point below in year two, and at the full note rate after that.
Qualification is where this matters. Fannie Mae qualifies borrowers at the note rate and ignores the bought-down rate. Freddie Mac also uses the note rate, and VA uses the full payment due after the buydown ends. A temporary buydown lowers your first two years of payments, but it doesn't raise the loan amount you qualify for. A fixed 4.99% for 30 years and a 2-1 buydown that steps up to a note rate near 7% can show similar payments in year one and very different payments in year three.
A Few Common Questions
Can a resale seller in Katy pay for my rate buydown? Yes, within the same caps a builder faces. That means 3%, 6% or 9% on conventional loans depending on loan-to-value, 6% on FHA, and VA's 4% concession ceiling for temporary buydowns. Common and customary fees a seller pays under local custom don't count toward Fannie Mae's cap.
Does the $555,685 Katy–Southwest median describe resale homes only? HAR's September 2026 snapshot doesn't say whether new construction is excluded, so read it as a figure for the whole market area.
Do the builder deadlines matter if I'm still comparing? The advertised terms depend on closing dates. Newmark's offer requires closing by November 30, 2026, and Perry's requires closing by December 31, 2026, so the rate is tied to how quickly a home can close.
Comparing a builder's rate offer in Elyson against a Katy resale home with room to negotiate takes the full payment math, worked out under the caps your loan type allows. If you're selling in Katy and want to know what a rate concession could do for your listing compared with a price cut, The Realty Chick can run both numbers for you. Hatch your next move with a free home valuation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
