A newly married couple is having trouble affording a home. What type of mortgage arrangement would reduce the monthly payment as a result of an interest rate subsidy from a builder or real estate developer?

The correct answer is buy down.

Explanation:

The buy down agreement refers to a reduction made within a mortgage contract, and where buyers are expected to enjoy a lower rate during the first years of amortization, and to meet all obligations. In the example, people have liquidity problems, and this type of contract allows them a better option so that they do not fall behind in their recurring payments.