In Fountain's New-Home Ads, the Price on the Sign Isn't the Price in the Payment Example

The house at 11324 Pura Vida Way in Challenger Homes' Ventana South community in Fountain was listed in October at $375,400, marked down from $410,400. It's an Antero plan with three bedrooms, two baths, 1,494 square feet and a one-car garage. The listing put the payment at $2,451 a month.

Further down the same page is the builder's payment example, and it uses a "modeled adjusted contract price" of $420,612.48.

That modeled gap of about $45,000 shows how a builder buydown can be financed. If you're a VA buyer or a first-time buyer comparing a Fountain new build with a resale home down the street, the sign price is the wrong number to compare. The price being financed, the loan amount and the payment in year four are the right ones.

Three numbers for one house

The builder's own payment example for Pura Vida Way models a VA loan with no down payment for a buyer with full entitlement. Here's how it gets from the advertised price to the loan:

The sales price plus the buydown plus the closing-cost credit equals the modeled contract price. Add the financed funding fee and you get the loan, to within a cent. Challenger's listing explains that in this example, financing costs are modeled through a higher contract price and seller credits, subject to lender approval and appraisal support.

In this example, the buydown isn't money left over after the price cut. It's built into the amount the buyer borrows. For that to work, the appraisal has to support the higher modeled price, about $420,600, not $375,400.

What the payment does after year three

A 3-2-1 buydown lowers the rate by three points in year one, two points in year two and one point in year three. The full note rate, 6.5% in this example, starts in year four. Here's the builder's schedule for the same house:

1. Year 1, at 3.5%: $2,451.28 a month
2. Year 2, at 4.5%: $2,698.93 a month
3. Year 3, at 5.5%: $2,961.47 a month
4. Year 4 onward, at 6.5%: $3,237.65 a month

From year one to year four, the payment goes up $786.37 a month. The worksheet also holds taxes, insurance and the $47 HOA/metro charge flat for all four years, and it notes those amounts can change.

The advertised $2,451 is a real payment, but it lasts one year. In the example, the $3,237.65 payment applies for the rest of a 30-year loan on a modeled $429,655.64 balance. A resale home's loan has no step-up built in. Its payment starts at the full rate on day one.

Why builders have this much to spend right now

Incentives this large come from timing, and the timing traces back to a code change.

On June 30, 2026, the Pikes Peak Regional Building Department switched to the second printing of its regional code. That code includes the 2021 IECC energy code and Colorado's Model Electric Ready and Solar Ready Code. The Gazette reported that the change applies only to new builds. It cited a Common Sense Institute estimate that the stricter energy code adds $6,450 to $22,352 per home. The same article reported that builders filed plans quickly to beat the deadline. By noon on June 30, PPRBD had recorded 364 single-family permits for the month, 110 more than at the same point in 2025.

Then permits fell off. The Gazette's October 4 market report said PPRBD had issued only 42 new single-family permits by mid-September, against 181 for all of September 2025. In that report, a veteran local agent attributed the drop to builders starting homes before the code deadline. PPRBD's October 2026 permit activity report shows the decline continued:

• Detached houses, October: 148 in 2026, down from 188 in October 2025
• Townhouses, October: 3 in 2026, down from 45 in October 2025
• Detached houses, year to date through October: 2,044, up 0.69% from 2,030 for the same months of 2025

Through August, year-to-date detached permits were running 6% ahead of 2025, according to the Gazette. By the end of October, that lead had shrunk to less than 1%. Builders didn't build more homes this year. They started more of them earlier, ahead of the code change. The same Gazette report said new development is concentrated on the east side and to the south toward Fountain, where builders are offering closing-cost credits and lower in-house interest rates.

The Lorson Ranch version comes with a deadline and a required lender

D.R. Horton is selling at The Ridge at Lorson Ranch, next to Fountain, which the builder lists under Colorado Springs and advertises from $396,990.

D.R. Horton's holiday offer, called Settle In & Save, works differently from a buydown. FHA borrowers can save up to two months of interest. VA borrowers can save up to two principal-and-interest payments. The fine print says the seller's contribution is held in escrow and applied to future payments. To qualify, buyers have to finance through DHI Mortgage, the builder's affiliated lender, sign a contract between November 2 and December 31, 2026, and close before February 26, 2027.

For this program, D.R. Horton's offer terms list maximum contribution limits of up to 6% on FHA loans and 4% on VA loans, and the borrower must qualify at the full payment amount.

D.R. Horton also advertises special rates on certain homes: 5.50% on FHA loans and 5.99% on conventional loans. That offer requires a contract on or after September 29, 2026 and a closing by January 29, 2027. As of this post's publish date, both offers are still open, and both close at the start of 2027.

What resale sellers in the same price range are up against

The countywide numbers look calm. According to PPAR's elevateMLS October 2026 sales report, the median sales price for El Paso County single-family and patio homes in October 2026 was $475,000, the same as in October 2025. Underneath that median, things moved:

There were more homes for sale, fewer sales, and homes sat four days longer, but the median stayed put. A sales price doesn't capture credits, buydowns and payment subsidies. In the Pura Vida Way payment example, the price is $375,400, and the modeled financed amount adds $45,212.48 in buydown and closing costs on top of it.

Fountain's resale sellers are competing in the busiest part of the market. In the Gazette's October report, the same local agent said most showings across the region were for homes priced between $300,000 and $400,000. He also said that areas near new construction tend to favor buyers, because builder incentives make it harder to sell older homes. A Fountain resale home listed at $390,000 isn't really being compared with a $375,400 builder price. It's being compared with a $2,451 first-year payment.

To compare the two fairly, look at the same three numbers for each home: the price being financed, the total loan amount, and the payment in the first month of year four. For a resale home, all three are usually close to the asking price and the payment at today's rate. For a builder home with a buydown, they can be tens of thousands of dollars and several hundred dollars a month apart from the advertised figures.

Builder offers, loan programs and contribution limits change often, and every buyer's eligibility is different. This post is general information, not financial or legal advice. Before you sign, ask your lender for a full Loan Estimate and confirm your situation with the appropriate professional.

FAQ

Does the new energy code apply to resale homes?

No. The Gazette reported that the energy-code change applies only to new builds.

Why does the appraisal matter more on a buydown home?

In the Challenger example, the buydown and closing credit are built into a modeled contract price of $420,612.48, and the worksheet says this depends on appraisal support. The appraisal has to support that higher price, not against the $375,400 on the sign.

Before you choose between a builder buydown and a resale home in Fountain, The Galloway Group can put both homes side by side with the same three numbers for each, so you know what you'll be paying in year four before you're there. Get Your Free Home Roadmap.