Remember Stupid Pet Tricks on letterman…well this is Stupid Lender Tricks from a lender. there is no deferred interest. Basically it works in a falling market because comps support higher prices than are being paid. Here’s how it works. Buyer negotiates price and adds 12 months payments to the price. Lender lets seller credit buyer and pre pay the first year. Buyer has a bigger loan but gets interest writeoff for first year without making payments.

My thought…if you dont have the $$$ for the 1st 12 months of payments you probably shouldnt be buying the house.