Generally in exchange for payment of an up-front fee, the borrower may choose to lock-in a slightly higher than prevailing interest rate and have a one-time option to reduce the rate, or “float-down” should rates fall during the lock-in period. Under this option, both the initial locked rate and the float-down rate, if applicable, will be higher than the prevailing rate. The one-time float down option may be exercised at any time during the lock-in period, but not later than drawing of loan documents.
