What is a PITI Abatement mortgage loan program?


A PITI Abatement mortgage loan program is one that allows sellers/homebuilders to pay several (usually no more than 6) months of borrowers' principal, interest, taxes and insurance (PITI) payments.

The Benefits of PITI Abatement

  • Sellers enjoy speeding up the sale process;
  • Homebuyers that are short on cash enjoy financial assistance to move into a new home faster and can focus on furnishing the home rather than on immediate mortgage payments;
  • With ARM loans the abatement ensures greater security in case of interest rate fluctuations.

Features of PITI Abatement Mortgage Loans

The PITI Abatement home loan commonly has the following characteristics:

  • Mostly offered with 15 and 30-year FRMs;
  • Hybrid ARMs are also available;
  • Credit score of 600 and higher is usually required;
  • Loan LTV can reach 100%;
  • Prepayment penalty is unlikely to appear on the loan agreement;
  • Closing costs plus 6-month PITI payments offered to be covered by the seller/home builder.

PITI Abatement mortgages are a top mortgage product - one of the most recently developed and as popular as 3-2-1 Buy-down and FHA home loans.

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