FINERACT-2311: Add buydown fees to loan

fineract-core/src/main/java/org/apache/fineract/commands/service/CommandWrapperBuilder.java

@@ -3858,4 +3858,13 @@ public class CommandWrapperBuilder {
         this.href = "/loans/" + loanId;
         return this;
     }
+
+    public CommandWrapperBuilder makeLoanBuyDownFee(final Long loanId) {
+        this.actionName = "BUYDOWNFEE";
+        this.entityName = "LOAN";
+        this.entityId = null;
+        this.loanId = loanId;
+        this.href = "/loans/" + loanId + "/transactions/template?command=buyDownFee";
+        return this;
+    }
 }

fineract-loan/src/main/java/org/apache/fineract/accounting/productaccountmapping/service/LoanProductToGLAccountMappingHelper.java

@@ -173,6 +173,9 @@ public class LoanProductToGLAccountMappingHelper extends ProductToGLAccountMappi
         final Long incomeFromRecoveryAccountId = this.fromApiJsonHelper
                 .extractLongNamed(LoanProductAccountingParams.INCOME_FROM_RECOVERY.getValue(), element);
 
+        final Long incomeFromBuyDownFeesAccountId = this.fromApiJsonHelper
+                .extractLongNamed(LoanProductAccountingParams.INCOME_FROM_BUY_DOWN.getValue(), element);
+
         final Long writeOffAccountId = this.fromApiJsonHelper.extractLongNamed(LoanProductAccountingParams.LOSSES_WRITTEN_OFF.getValue(),
                 element);
         final Long overPaymentAccountId = this.fromApiJsonHelper.extractLongNamed(LoanProductAccountingParams.OVERPAYMENT.getValue(),
@@ -198,12 +201,14 @@ public class LoanProductToGLAccountMappingHelper extends ProductToGLAccountMappi
             case ACCRUAL_PERIODIC:
                 populateChangesForAccrualBasedAccounting(changes, fundAccountId, loanPortfolioAccountId, incomeFromInterestId,
                         incomeFromFeeId, incomeFromPenaltyId, writeOffAccountId, overPaymentAccountId, transfersInSuspenseAccountId,
-                        incomeFromRecoveryAccountId, receivableInterestAccountId, receivableFeeAccountId, receivablePenaltyAccountId);
+                        incomeFromRecoveryAccountId, incomeFromBuyDownFeesAccountId, receivableInterestAccountId, receivableFeeAccountId,
+                        receivablePenaltyAccountId);
             break;
             case ACCRUAL_UPFRONT:
                 populateChangesForAccrualBasedAccounting(changes, fundAccountId, loanPortfolioAccountId, incomeFromInterestId,
                         incomeFromFeeId, incomeFromPenaltyId, writeOffAccountId, overPaymentAccountId, transfersInSuspenseAccountId,
-                        incomeFromRecoveryAccountId, receivableInterestAccountId, receivableFeeAccountId, receivablePenaltyAccountId);
+                        incomeFromRecoveryAccountId, incomeFromBuyDownFeesAccountId, receivableInterestAccountId, receivableFeeAccountId,
+                        receivablePenaltyAccountId);
             break;
         }
 
@@ -213,8 +218,8 @@ public class LoanProductToGLAccountMappingHelper extends ProductToGLAccountMappi
     private void populateChangesForAccrualBasedAccounting(final Map<String, Object> changes, final Long fundAccountId,
             final Long loanPortfolioAccountId, final Long incomeFromInterestId, final Long incomeFromFeeId, final Long incomeFromPenaltyId,
             final Long writeOffAccountId, final Long overPaymentAccountId, final Long transfersInSuspenseAccountId,
-            final Long incomeFromRecoveryAccountId, final Long receivableInterestAccountId, final Long receivableFeeAccountId,
+            final Long incomeFromRecoveryAccountId, final Long incomeFromBuyDownFeesAccountId, final Long receivableInterestAccountId,
-            final Long receivablePenaltyAccountId) {
+            final Long receivableFeeAccountId, final Long receivablePenaltyAccountId) {
 
         changes.put(LoanProductAccountingParams.INTEREST_RECEIVABLE.getValue(), receivableInterestAccountId);
         changes.put(LoanProductAccountingParams.FEES_RECEIVABLE.getValue(), receivableFeeAccountId);

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/api/LoanApiConstants.java

@@ -181,6 +181,8 @@ public interface LoanApiConstants {
     String CAPITALIZED_INCOME_ADJUSTMENT_TRANSACTION_COMMAND = "capitalizedIncomeAdjustment";
     String CONTRACT_TERMINATION_COMMAND = "contractTermination";
     String UNDO_CONTRACT_TERMINATION_COMMAND = "undoContractTermination";
+    String BUY_DOWN_FEE_COMMAND = "buyDownFee";
+    String BUY_DOWN_FEE_ADJUSTMENT_COMMAND = "buyDownFeeAdjustment";
 
     // Data Validator names
     String LOAN_FRAUD_DATAVALIDATOR_PREFIX = "loans.fraud";

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/data/LoanTransactionEnumData.java

@@ -72,6 +72,8 @@ public class LoanTransactionEnumData implements Serializable {
     private final boolean capitalizedIncomeAdjustment;
     private final boolean capitalizedIncomeAmortizationAdjustment;
     private final boolean contractTermination;
+    private final boolean buyDownFee;
+    private final boolean buyDownFeeAdjustment;
 
     public LoanTransactionEnumData(final Long id, final String code, final String value) {
         this.id = id;
@@ -114,6 +116,8 @@ public class LoanTransactionEnumData implements Serializable {
         this.capitalizedIncomeAmortizationAdjustment = Long
                 .valueOf(LoanTransactionType.CAPITALIZED_INCOME_AMORTIZATION_ADJUSTMENT.getValue()).equals(this.id);
         this.contractTermination = Long.valueOf(LoanTransactionType.CONTRACT_TERMINATION.getValue()).equals(this.id);
+        this.buyDownFee = Long.valueOf(LoanTransactionType.BUY_DOWN_FEE.getValue()).equals(this.id);
+        this.buyDownFeeAdjustment = Long.valueOf(LoanTransactionType.BUY_DOWN_FEE_ADJUSTMENT.getValue()).equals(this.id);
     }
 
     public boolean isRepaymentType() {

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanTransaction.java

@@ -961,4 +961,13 @@ public class LoanTransaction extends AbstractAuditableWithUTCDateTimeCustom<Long
         this.dateOf = transactionDate;
     }
 
+    public static LoanTransaction buyDownFee(final Loan loan, final Money amount, final PaymentDetail paymentDetail,
+            final LocalDate transactionDate, final ExternalId externalId) {
+        return new LoanTransaction(loan, loan.getOffice(), LoanTransactionType.BUY_DOWN_FEE, paymentDetail, amount.getAmount(),
+                transactionDate, externalId);
+    }
+
+    public boolean isBuyDownFee() {
+        return LoanTransactionType.BUY_DOWN_FEE.equals(this.typeOf);
+    }
 }

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/LoanTransactionType.java

@@ -73,6 +73,9 @@ public enum LoanTransactionType {
     CAPITALIZED_INCOME_AMORTIZATION_ADJUSTMENT(39, "loanTransactionType.capitalizedIncomeAmortizationAdjustment"), //
     // Kind of Final Transactions
     CONTRACT_TERMINATION(38, "loanTransactionType.contractTermination"), //
+
+    BUY_DOWN_FEE(40, "loanTransactionType.buyDownFee"), //
+    BUY_DOWN_FEE_ADJUSTMENT(41, "loanTransactionType.buyDownFeeAdjustment"), //
     ;
 
     private final Integer value;
@@ -128,6 +131,8 @@ public enum LoanTransactionType {
             case 37 -> LoanTransactionType.CAPITALIZED_INCOME_ADJUSTMENT;
             case 38 -> LoanTransactionType.CONTRACT_TERMINATION;
             case 39 -> LoanTransactionType.CAPITALIZED_INCOME_AMORTIZATION_ADJUSTMENT;
+            case 40 -> LoanTransactionType.BUY_DOWN_FEE;
+            case 41 -> LoanTransactionType.BUY_DOWN_FEE_ADJUSTMENT;
             default -> LoanTransactionType.INVALID;
         };
     }
@@ -256,4 +261,12 @@ public enum LoanTransactionType {
     public boolean isContractTermination() {
         return this == LoanTransactionType.CONTRACT_TERMINATION;
     }
+
+    public boolean isBuyDownFee() {
+        return this == LoanTransactionType.BUY_DOWN_FEE;
+    }
+
+    public boolean isBuyDownFeeAdjustment() {
+        return this == LoanTransactionType.BUY_DOWN_FEE_ADJUSTMENT;
+    }
 }

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/exception/LoanTransactionProcessingException.java

@@ -0,0 +1,36 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanaccount.exception;
+
+import org.apache.fineract.infrastructure.core.exception.AbstractPlatformDomainRuleException;
+
+/**
+ * {@link AbstractPlatformDomainRuleException} thrown when loan transaction processing violates a domain rule.
+ */
+public class LoanTransactionProcessingException extends AbstractPlatformDomainRuleException {
+
+    public LoanTransactionProcessingException(final String defaultUserMessage, final Object... defaultUserMessageArgs) {
+        super("error.msg.loan.transaction.processing", defaultUserMessage, defaultUserMessageArgs);
+    }
+
+    public LoanTransactionProcessingException(final String action, final String defaultUserMessage,
+            final Object... defaultUserMessageArgs) {
+        super("error.msg.loan.transaction." + action, defaultUserMessage, defaultUserMessageArgs);
+    }
+}

fineract-loan/src/main/java/org/apache/fineract/portfolio/loanproduct/service/LoanEnumerations.java

@@ -338,6 +338,10 @@ public final class LoanEnumerations {
             case CAPITALIZED_INCOME_AMORTIZATION_ADJUSTMENT -> new LoanTransactionEnumData(
                     LoanTransactionType.CAPITALIZED_INCOME_AMORTIZATION_ADJUSTMENT.getValue().longValue(),
                     LoanTransactionType.CAPITALIZED_INCOME_AMORTIZATION_ADJUSTMENT.getCode(), "Capitalized Income Amortization Adjustment");
+            case BUY_DOWN_FEE -> new LoanTransactionEnumData(LoanTransactionType.BUY_DOWN_FEE.getValue().longValue(),
+                    LoanTransactionType.BUY_DOWN_FEE.getCode(), "Buy Down Fee");
+            case BUY_DOWN_FEE_ADJUSTMENT -> new LoanTransactionEnumData(LoanTransactionType.BUY_DOWN_FEE_ADJUSTMENT.getValue().longValue(),
+                    LoanTransactionType.BUY_DOWN_FEE_ADJUSTMENT.getCode(), "Buy Down Fee Adjustment");
         };
     }
 

fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/handler/AddBuyDownFeeCommandHandler.java

@@ -0,0 +1,53 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanaccount.handler;
+
+import lombok.RequiredArgsConstructor;
+import org.apache.fineract.commands.annotation.CommandType;
+import org.apache.fineract.commands.handler.NewCommandSourceHandler;
+import org.apache.fineract.infrastructure.DataIntegrityErrorHandler;
+import org.apache.fineract.infrastructure.core.api.JsonCommand;
+import org.apache.fineract.infrastructure.core.data.CommandProcessingResult;
+import org.apache.fineract.portfolio.loanaccount.service.BuyDownFeePlatformService;
+import org.springframework.dao.DataIntegrityViolationException;
+import org.springframework.orm.jpa.JpaSystemException;
+import org.springframework.stereotype.Service;
+import org.springframework.transaction.annotation.Transactional;
+
+@Service
+@RequiredArgsConstructor
+@CommandType(entity = "LOAN", action = "BUYDOWNFEE")
+public class AddBuyDownFeeCommandHandler implements NewCommandSourceHandler {
+
+    private final BuyDownFeePlatformService buyDownFeePlatformService;
+    private final DataIntegrityErrorHandler dataIntegrityErrorHandler;
+
+    @Transactional
+    @Override
+    public CommandProcessingResult processCommand(final JsonCommand command) {
+
+        try {
+            return this.buyDownFeePlatformService.makeLoanBuyDownFee(command.getLoanId(), command);
+        } catch (final JpaSystemException | DataIntegrityViolationException dve) {
+            dataIntegrityErrorHandler.handleDataIntegrityIssues(command, dve.getMostSpecificCause(), dve, "loan.buy.down.fee",
+                    "Buy Down Fee");
+            return CommandProcessingResult.empty();
+        }
+    }
+}

fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/service/BuyDownFeePlatformService.java

@@ -0,0 +1,29 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanaccount.service;
+
+import org.apache.fineract.infrastructure.core.api.JsonCommand;
+import org.apache.fineract.infrastructure.core.data.CommandProcessingResult;
+import org.springframework.transaction.annotation.Transactional;
+
+public interface BuyDownFeePlatformService {
+
+    @Transactional
+    CommandProcessingResult makeLoanBuyDownFee(Long loanId, JsonCommand command);
+}

fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/service/BuyDownFeeWritePlatformServiceImpl.java

@@ -0,0 +1,123 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanaccount.service;
+
+import java.math.BigDecimal;
+import java.time.LocalDate;
+import java.util.ArrayList;
+import java.util.LinkedHashMap;
+import java.util.List;
+import java.util.Map;
+import lombok.RequiredArgsConstructor;
+import lombok.extern.slf4j.Slf4j;
+import org.apache.commons.lang3.StringUtils;
+import org.apache.fineract.infrastructure.core.api.JsonCommand;
+import org.apache.fineract.infrastructure.core.data.CommandProcessingResult;
+import org.apache.fineract.infrastructure.core.data.CommandProcessingResultBuilder;
+import org.apache.fineract.infrastructure.core.domain.ExternalId;
+import org.apache.fineract.infrastructure.core.service.ExternalIdFactory;
+import org.apache.fineract.organisation.monetary.domain.Money;
+import org.apache.fineract.portfolio.client.domain.Client;
+import org.apache.fineract.portfolio.client.exception.ClientNotActiveException;
+import org.apache.fineract.portfolio.group.domain.Group;
+import org.apache.fineract.portfolio.group.exception.GroupNotActiveException;
+import org.apache.fineract.portfolio.loanaccount.domain.Loan;
+import org.apache.fineract.portfolio.loanaccount.domain.LoanTransaction;
+import org.apache.fineract.portfolio.loanaccount.domain.LoanTransactionRepository;
+import org.apache.fineract.portfolio.note.service.NoteWritePlatformService;
+import org.apache.fineract.portfolio.paymentdetail.domain.PaymentDetail;
+import org.apache.fineract.portfolio.paymentdetail.service.PaymentDetailWritePlatformService;
+import org.springframework.transaction.annotation.Transactional;
+
+@Slf4j
+@RequiredArgsConstructor
+public class BuyDownFeeWritePlatformServiceImpl implements BuyDownFeePlatformService {
+
+    private final ProgressiveLoanTransactionValidator loanTransactionValidator;
+    private final LoanAssembler loanAssembler;
+    private final LoanTransactionRepository loanTransactionRepository;
+    private final PaymentDetailWritePlatformService paymentDetailWritePlatformService;
+    private final LoanJournalEntryPoster loanJournalEntryPoster;
+    private final NoteWritePlatformService noteWritePlatformService;
+    private final ExternalIdFactory externalIdFactory;
+
+    @Transactional
+    @Override
+    public CommandProcessingResult makeLoanBuyDownFee(final Long loanId, final JsonCommand command) {
+
+        this.loanTransactionValidator.validateBuyDownFee(command, loanId);
+
+        final Loan loan = this.loanAssembler.assembleFrom(loanId);
+        checkClientOrGroupActive(loan);
+
+        final List<Long> existingTransactionIds = new ArrayList<>(loanTransactionRepository.findTransactionIdsByLoan(loan));
+        final List<Long> existingReversedTransactionIds = new ArrayList<>(loanTransactionRepository.findReversedTransactionIdsByLoan(loan));
+        final Map<String, Object> changes = new LinkedHashMap<>();
+
+        // Create payment details
+        final PaymentDetail paymentDetail = this.paymentDetailWritePlatformService.createAndPersistPaymentDetail(command, changes);
+
+        // Extract transaction details
+        final LocalDate transactionDate = command.localDateValueOfParameterNamed("transactionDate");
+        final BigDecimal transactionAmount = command.bigDecimalValueOfParameterNamed("transactionAmount");
+        final ExternalId txnExternalId = externalIdFactory.createFromCommand(command, "externalId");
+
+        // Create buy down fee transaction
+        final Money buyDownFeeAmount = Money.of(loan.getCurrency(), transactionAmount); // FLAT calculation
+        final LoanTransaction buyDownFeeTransaction = LoanTransaction.buyDownFee(loan, buyDownFeeAmount, paymentDetail, transactionDate,
+                txnExternalId);
+
+        // Add to loan (NO schedule recalculation as per requirements)
+        loan.addLoanTransaction(buyDownFeeTransaction);
+
+        // Save transaction
+        loanTransactionRepository.saveAndFlush(buyDownFeeTransaction);
+
+        // Update loan derived fields
+        loan.updateLoanScheduleDependentDerivedFields();
+
+        // Add note if provided
+        final String noteText = command.stringValueOfParameterNamed("note");
+        if (StringUtils.isNotBlank(noteText)) {
+            noteWritePlatformService.createLoanTransactionNote(buyDownFeeTransaction.getId(), noteText);
+        }
+
+        // Post journal entries
+        loanJournalEntryPoster.postJournalEntries(loan, existingTransactionIds, existingReversedTransactionIds);
+
+        return new CommandProcessingResultBuilder() //
+                .withClientId(loan.getClientId()) //
+                .withOfficeId(loan.getOfficeId()) //
+                .withLoanId(loan.getId()) //
+                .withEntityId(buyDownFeeTransaction.getId()) //
+                .withEntityExternalId(buyDownFeeTransaction.getExternalId()) //
+                .build();
+    }
+
+    private void checkClientOrGroupActive(final Loan loan) {
+        final Client client = loan.client();
+        if (client != null && client.isNotActive()) {
+            throw new ClientNotActiveException(client.getId());
+        }
+        final Group group = loan.group();
+        if (group != null && group.isNotActive()) {
+            throw new GroupNotActiveException(group.getId());
+        }
+    }
+}

fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/service/ProgressiveLoanTransactionValidator.java

@@ -28,4 +28,6 @@ public interface ProgressiveLoanTransactionValidator extends LoanTransactionVali
     void validateCapitalizedIncomeAdjustment(JsonCommand command, Long loanId, Long capitalizedIncomeTransactionId);
 
     void validateContractTerminationUndo(JsonCommand command, Long loanId);
+
+    void validateBuyDownFee(JsonCommand command, Long loanId);
 }

fineract-progressive-loan/src/main/java/org/apache/fineract/portfolio/loanaccount/service/ProgressiveLoanTransactionValidatorImpl.java

@@ -23,6 +23,7 @@ import com.google.gson.reflect.TypeToken;
 import java.lang.reflect.Type;
 import java.math.BigDecimal;
 import java.time.LocalDate;
+import java.util.ArrayList;
 import java.util.Arrays;
 import java.util.HashSet;
 import java.util.List;
@@ -33,9 +34,11 @@ import lombok.RequiredArgsConstructor;
 import lombok.extern.slf4j.Slf4j;
 import org.apache.commons.lang3.StringUtils;
 import org.apache.fineract.infrastructure.core.api.JsonCommand;
+import org.apache.fineract.infrastructure.core.data.ApiParameterError;
 import org.apache.fineract.infrastructure.core.data.DataValidatorBuilder;
 import org.apache.fineract.infrastructure.core.exception.GeneralPlatformDomainRuleException;
 import org.apache.fineract.infrastructure.core.exception.InvalidJsonException;
+import org.apache.fineract.infrastructure.core.exception.PlatformApiDataValidationException;
 import org.apache.fineract.infrastructure.core.serialization.FromJsonHelper;
 import org.apache.fineract.infrastructure.core.service.DateUtils;
 import org.apache.fineract.infrastructure.core.service.MathUtil;
@@ -53,6 +56,7 @@ import org.apache.fineract.portfolio.loanaccount.domain.LoanStatus;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanTransaction;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanTransactionRepository;
 import org.apache.fineract.portfolio.loanaccount.domain.LoanTransactionType;
+import org.apache.fineract.portfolio.loanaccount.exception.LoanTransactionProcessingException;
 import org.apache.fineract.portfolio.loanaccount.repository.LoanCapitalizedIncomeBalanceRepository;
 import org.apache.fineract.portfolio.loanaccount.serialization.LoanTransactionValidator;
 import org.apache.fineract.portfolio.loanproduct.domain.LoanProduct;
@@ -269,6 +273,60 @@ public class ProgressiveLoanTransactionValidatorImpl implements ProgressiveLoanT
         });
     }
 
+    private static final List<String> BUY_DOWN_FEE_TRANSACTION_SUPPORTED_PARAMETERS = List
+            .of(new String[] { "transactionDate", "dateFormat", "locale", "transactionAmount", "paymentTypeId", "note", "externalId" });
+
+    @Override
+    public void validateBuyDownFee(JsonCommand command, Long loanId) {
+        final String json = command.json();
+        final Type typeOfMap = new TypeToken<Map<String, Object>>() {}.getType();
+        this.fromApiJsonHelper.checkForUnsupportedParameters(typeOfMap, json, BUY_DOWN_FEE_TRANSACTION_SUPPORTED_PARAMETERS);
+
+        final List<ApiParameterError> dataValidationErrors = new ArrayList<>();
+        final DataValidatorBuilder baseDataValidator = new DataValidatorBuilder(dataValidationErrors)
+                .resource("loan.transaction.buyDownFee");
+
+        final JsonElement element = this.fromApiJsonHelper.parse(json);
+        final Loan loan = this.loanRepositoryWrapper.findOneWithNotFoundDetection(loanId, true);
+
+        if (!loan.getLoanProductRelatedDetail().isEnableBuyDownFee()) {
+            baseDataValidator.reset().failWithCodeNoParameterAddedToErrorCode("buy.down.fee.not.enabled",
+                    "Buy down fee is not enabled for this loan product");
+        }
+
+        // Basic validation
+        validateBuyDownFeeEligibility(loan);
+
+        final LocalDate transactionDate = this.fromApiJsonHelper.extractLocalDateNamed("transactionDate", element);
+        baseDataValidator.reset().parameter("transactionDate").value(transactionDate).notNull();
+
+        // Validate transaction date is on or after first disbursement
+        if (transactionDate != null) {
+            final LocalDate firstDisbursementDate = loan.getDisbursementDate();
+            if (firstDisbursementDate != null && transactionDate.isBefore(firstDisbursementDate)) {
+                baseDataValidator.reset().parameter("transactionDate").failWithCode("cannot.be.before.first.disbursement.date");
+            }
+        }
+
+        final BigDecimal transactionAmount = this.fromApiJsonHelper.extractBigDecimalWithLocaleNamed("transactionAmount", element);
+        baseDataValidator.reset().parameter("transactionAmount").value(transactionAmount).notNull().positiveAmount();
+
+        throwExceptionIfValidationWarningsExist(dataValidationErrors);
+    }
+
+    public void validateBuyDownFeeEligibility(Loan loan) {
+        if (!loan.getStatus().isActive()) {
+            throw new LoanTransactionProcessingException("Buy Down fees can only be added to active loans");
+        }
+    }
+
+    private void throwExceptionIfValidationWarningsExist(final List<ApiParameterError> dataValidationErrors) {
+        if (!dataValidationErrors.isEmpty()) {
+            throw new PlatformApiDataValidationException("validation.msg.validation.errors.exist", "Validation errors exist.",
+                    dataValidationErrors);
+        }
+    }
+
     // Delegates
     @Override
     public void validateDisbursement(JsonCommand command, boolean isAccountTransfer, Long loanId) {

fineract-provider/src/main/java/org/apache/fineract/accounting/journalentry/service/AccrualBasedAccountingProcessorForLoan.java

@@ -145,6 +145,10 @@ public class AccrualBasedAccountingProcessorForLoan implements AccountingProcess
             if (transactionType.isCapitalizedIncomeAmortizationAdjustment()) {
                 createJournalEntriesForCapitalizedIncomeAmortizationAdjustment(loanDTO, loanTransactionDTO, office);
             }
+            // Handle Buy Down Fee
+            if (transactionType.isBuyDownFee()) {
+                createJournalEntriesForBuyDownFee(loanDTO, loanTransactionDTO, office);
+            }
         }
     }
 
@@ -412,6 +416,26 @@ public class AccrualBasedAccountingProcessorForLoan implements AccountingProcess
         }
     }
 
+    private void createJournalEntriesForBuyDownFee(final LoanDTO loanDTO, final LoanTransactionDTO loanTransactionDTO,
+            final Office office) {
+        // loan properties
+        final Long loanProductId = loanDTO.getLoanProductId();
+        final Long loanId = loanDTO.getLoanId();
+        final String currencyCode = loanDTO.getCurrencyCode();
+
+        // transaction properties
+        final String transactionId = loanTransactionDTO.getTransactionId();
+        final LocalDate transactionDate = loanTransactionDTO.getTransactionDate();
+        final BigDecimal amount = loanTransactionDTO.getAmount();
+        final Long paymentTypeId = loanTransactionDTO.getPaymentTypeId();
+
+        if (MathUtil.isGreaterThanZero(amount)) {
+            this.helper.createJournalEntriesForLoan(office, currencyCode, AccrualAccountsForLoan.BUY_DOWN_EXPENSE.getValue(),
+                    AccrualAccountsForLoan.DEFERRED_INCOME_LIABILITY.getValue(), loanProductId, paymentTypeId, loanId, transactionId,
+                    transactionDate, amount);
+        }
+    }
+
     private void createJournalEntriesForInterestPaymentWaiverOrInterestRefund(LoanDTO loanDTO, LoanTransactionDTO loanTransactionDTO,
             Office office) {
         final Long loanProductId = loanDTO.getLoanProductId();

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/api/LoanTransactionsApiResource.java

@@ -596,6 +596,8 @@ public class LoanTransactionsApiResource {
             commandRequest = builder.undoReAmortize(resolvedLoanId).build();
         } else if (CommandParameterUtil.is(commandParam, CAPITALIZED_INCOME)) {
             commandRequest = builder.addCapitalizedIncome(resolvedLoanId).build();
+        } else if (CommandParameterUtil.is(commandParam, LoanApiConstants.BUY_DOWN_FEE_COMMAND)) {
+            commandRequest = builder.makeLoanBuyDownFee(resolvedLoanId).build();
         }
 
         if (commandRequest == null) {
@@ -684,6 +686,8 @@ public class LoanTransactionsApiResource {
         } else if (CommandParameterUtil.is(commandParam, LoanApiConstants.CAPITALIZED_INCOME_ADJUSTMENT_TRANSACTION_COMMAND)) {
             transactionData = this.loanReadPlatformService.retrieveLoanTransactionTemplate(resolvedLoanId,
                     LoanTransactionType.CAPITALIZED_INCOME_ADJUSTMENT, transactionId);
+        } else if (CommandParameterUtil.is(commandParam, LoanApiConstants.BUY_DOWN_FEE_COMMAND)) {
+            transactionData = this.loanReadPlatformService.retrieveLoanTransactionTemplate(resolvedLoanId);
         } else {
             throw new UnrecognizedQueryParamException("command", commandParam);
         }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/starter/LoanAccountConfiguration.java

@@ -103,6 +103,8 @@ import org.apache.fineract.portfolio.loanaccount.serialization.LoanTransactionVa
 import org.apache.fineract.portfolio.loanaccount.serialization.LoanUpdateCommandFromApiJsonDeserializer;
 import org.apache.fineract.portfolio.loanaccount.service.BulkLoansReadPlatformService;
 import org.apache.fineract.portfolio.loanaccount.service.BulkLoansReadPlatformServiceImpl;
+import org.apache.fineract.portfolio.loanaccount.service.BuyDownFeePlatformService;
+import org.apache.fineract.portfolio.loanaccount.service.BuyDownFeeWritePlatformServiceImpl;
 import org.apache.fineract.portfolio.loanaccount.service.GLIMAccountInfoReadPlatformService;
 import org.apache.fineract.portfolio.loanaccount.service.GLIMAccountInfoReadPlatformServiceImpl;
 import org.apache.fineract.portfolio.loanaccount.service.GLIMAccountInfoWritePlatformService;
@@ -149,6 +151,7 @@ import org.apache.fineract.portfolio.loanaccount.service.LoanTransactionService;
 import org.apache.fineract.portfolio.loanaccount.service.LoanUtilService;
 import org.apache.fineract.portfolio.loanaccount.service.LoanWritePlatformService;
 import org.apache.fineract.portfolio.loanaccount.service.LoanWritePlatformServiceJpaRepositoryImpl;
+import org.apache.fineract.portfolio.loanaccount.service.ProgressiveLoanTransactionValidator;
 import org.apache.fineract.portfolio.loanaccount.service.ReplayedTransactionBusinessEventService;
 import org.apache.fineract.portfolio.loanaccount.service.ReplayedTransactionBusinessEventServiceImpl;
 import org.apache.fineract.portfolio.loanaccount.service.ReprocessLoanTransactionsService;
@@ -158,6 +161,7 @@ import org.apache.fineract.portfolio.loanproduct.domain.LoanProductRepository;
 import org.apache.fineract.portfolio.loanproduct.service.LoanDropdownReadPlatformService;
 import org.apache.fineract.portfolio.loanproduct.service.LoanProductReadPlatformService;
 import org.apache.fineract.portfolio.note.domain.NoteRepository;
+import org.apache.fineract.portfolio.note.service.NoteWritePlatformService;
 import org.apache.fineract.portfolio.paymentdetail.service.PaymentDetailWritePlatformService;
 import org.apache.fineract.portfolio.paymenttype.service.PaymentTypeReadPlatformService;
 import org.apache.fineract.portfolio.rate.service.RateAssembler;
@@ -372,6 +376,16 @@ public class LoanAccountConfiguration {
                 workingDaysRepository, loanScheduleFactory, floatingRatesReadPlatformService, calendarReadPlatformService, noteRepository);
     }
 
+    @Bean
+    @ConditionalOnMissingBean(BuyDownFeePlatformService.class)
+    public BuyDownFeePlatformService buyDownFeePlatformService(ProgressiveLoanTransactionValidator loanTransactionValidator,
+            LoanAssembler loanAssembler, LoanTransactionRepository loanTransactionRepository,
+            PaymentDetailWritePlatformService paymentDetailWritePlatformService, LoanJournalEntryPoster loanJournalEntryPoster,
+            NoteWritePlatformService noteWritePlatformService, ExternalIdFactory externalIdFactory) {
+        return new BuyDownFeeWritePlatformServiceImpl(loanTransactionValidator, loanAssembler, loanTransactionRepository,
+                paymentDetailWritePlatformService, loanJournalEntryPoster, noteWritePlatformService, externalIdFactory);
+    }
+
     @Bean
     @ConditionalOnMissingBean(LoanWritePlatformService.class)
     public LoanWritePlatformService loanWritePlatformService(PlatformSecurityContext context,
@@ -407,7 +421,7 @@ public class LoanAccountConfiguration {
             LoanJournalEntryPoster journalEntryPoster, LoanAdjustmentService loanAdjustmentService,
             LoanAccountingBridgeMapper loanAccountingBridgeMapper, LoanMapper loanMapper,
             LoanTransactionProcessingService loanTransactionProcessingService, final LoanBalanceService loanBalanceService,
-            LoanTransactionService loanTransactionService) {
+            LoanTransactionService loanTransactionService, BuyDownFeePlatformService buyDownFeePlatformService) {
         return new LoanWritePlatformServiceJpaRepositoryImpl(context, loanTransactionValidator, loanUpdateCommandFromApiJsonDeserializer,
                 loanRepositoryWrapper, loanAccountDomainService, noteRepository, loanTransactionRepository,
                 loanTransactionRelationRepository, loanAssembler, journalEntryWritePlatformService, calendarInstanceRepository,

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/api/LoanProductsApiResource.java

@@ -175,7 +175,7 @@ public class LoanProductsApiResource {
     @Operation(summary = "Create a Loan Product", description = "Depending of the Accounting Rule (accountingRule) selected, additional fields with details of the appropriate Ledger Account identifiers would need to be passed in.\n"
             + "\n" + "Refer MifosX Accounting Specs Draft for more details regarding the significance of the selected accounting rule\n\n"
             + "Mandatory Fields: name, shortName, currencyCode, digitsAfterDecimal, inMultiplesOf, principal, numberOfRepayments, repaymentEvery, repaymentFrequencyType, interestRatePerPeriod, interestRateFrequencyType, amortizationType, interestType, interestCalculationPeriodType, transactionProcessingStrategyCode, accountingRule, isInterestRecalculationEnabled, daysInYearType, daysInMonthType\n\n"
-            + "Optional Fields: inArrearsTolerance, graceOnPrincipalPayment, graceOnInterestPayment, graceOnInterestCharged, graceOnArrearsAgeing, charges, paymentChannelToFundSourceMappings, feeToIncomeAccountMappings, penaltyToIncomeAccountMappings, chargeOffReasonToExpenseAccountMappings, includeInBorrowerCycle, useBorrowerCycle,principalVariationsForBorrowerCycle, numberOfRepaymentVariationsForBorrowerCycle, interestRateVariationsForBorrowerCycle, multiDisburseLoan,maxTrancheCount, outstandingLoanBalance,overdueDaysForNPA,holdGuaranteeFunds, principalThresholdForLastInstalment, accountMovesOutOfNPAOnlyOnArrearsCompletion, canDefineInstallmentAmount, installmentAmountInMultiplesOf, allowAttributeOverrides, allowPartialPeriodInterestCalcualtion,dueDaysForRepaymentEvent,overDueDaysForRepaymentEvent,enableDownPayment,disbursedAmountPercentageDownPayment,enableAutoRepaymentForDownPayment,repaymentStartDateType\n\n"
+            + "Optional Fields: inArrearsTolerance, graceOnPrincipalPayment, graceOnInterestPayment, graceOnInterestCharged, graceOnArrearsAgeing, charges, paymentChannelToFundSourceMappings, feeToIncomeAccountMappings, penaltyToIncomeAccountMappings, chargeOffReasonToExpenseAccountMappings, includeInBorrowerCycle, useBorrowerCycle,principalVariationsForBorrowerCycle, numberOfRepaymentVariationsForBorrowerCycle, interestRateVariationsForBorrowerCycle, multiDisburseLoan,maxTrancheCount, outstandingLoanBalance,overdueDaysForNPA,holdGuaranteeFunds, principalThresholdForLastInstalment, accountMovesOutOfNPAOnlyOnArrearsCompletion, canDefineInstallmentAmount, installmentAmountInMultiplesOf, allowAttributeOverrides, allowPartialPeriodInterestCalcualtion,dueDaysForRepaymentEvent,overDueDaysForRepaymentEvent,enableDownPayment,disbursedAmountPercentageDownPayment,enableAutoRepaymentForDownPayment,repaymentStartDateType,enableBuyDownFee\n\n"
             + "Additional Mandatory Fields for Cash(2) based accounting: fundSourceAccountId, loanPortfolioAccountId, interestOnLoanAccountId, incomeFromFeeAccountId, incomeFromPenaltyAccountId, writeOffAccountId, transfersInSuspenseAccountId, overpaymentLiabilityAccountId\n\n"
             + "Additional Mandatory Fields for periodic (3) and upfront (4)accrual accounting: fundSourceAccountId, loanPortfolioAccountId, interestOnLoanAccountId, incomeFromFeeAccountId, incomeFromPenaltyAccountId, writeOffAccountId, receivableInterestAccountId, receivableFeeAccountId, receivablePenaltyAccountId, transfersInSuspenseAccountId, overpaymentLiabilityAccountId\n\n"
             + "Additional Mandatory Fields if interest recalculation is enabled(true): interestRecalculationCompoundingMethod, rescheduleStrategyMethod, recalculationRestFrequencyType\n\n"

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/serialization/LoanProductDataValidator.java

@@ -200,7 +200,8 @@ public final class LoanProductDataValidator {
             LoanProductConstants.CAPITALIZED_INCOME_CALCULATION_TYPE_PARAM_NAME,
             LoanProductConstants.CAPITALIZED_INCOME_STRATEGY_PARAM_NAME, LoanProductConstants.CAPITALIZED_INCOME_TYPE_PARAM_NAME,
             LoanProductConstants.ENABLE_BUY_DOWN_FEE_PARAM_NAME, LoanProductConstants.BUY_DOWN_FEE_CALCULATION_TYPE_PARAM_NAME,
-            LoanProductConstants.BUY_DOWN_FEE_STRATEGY_PARAM_NAME, LoanProductConstants.BUY_DOWN_FEE_INCOME_TYPE_PARAM_NAME));
+            LoanProductConstants.BUY_DOWN_FEE_STRATEGY_PARAM_NAME, LoanProductConstants.BUY_DOWN_FEE_INCOME_TYPE_PARAM_NAME,
+            LoanProductAccountingParams.BUY_DOWN_EXPENSE.getValue(), LoanProductAccountingParams.INCOME_FROM_BUY_DOWN.getValue()));
 
     private static final String[] SUPPORTED_LOAN_CONFIGURABLE_ATTRIBUTES = { LoanProductConstants.amortizationTypeParamName,
             LoanProductConstants.interestTypeParamName, LoanProductConstants.transactionProcessingStrategyCodeParamName,

fineract-provider/src/main/resources/db/changelog/tenant/changelog-tenant.xml

@@ -204,4 +204,5 @@
     <include file="parts/0183_add_LoanCapitalizedIncomeTransactionCreatedBusinessEvent.xml" relativeToChangelogFile="true" />
     <include file="parts/0184_add_document_event_configuration.xml" relativeToChangelogFile="true" />
     <include file="parts/0185_loan_buy_down_fee.xml" relativeToChangelogFile="true" />
+    <include file="parts/0186_add_buy_down_fee_to_loan_product.xml" relativeToChangelogFile="true" />
 </databaseChangeLog>

fineract-provider/src/main/resources/db/changelog/tenant/parts/0186_add_buy_down_fee_to_loan_product.xml

@@ -0,0 +1,44 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<!--
+
+    Licensed to the Apache Software Foundation (ASF) under one
+    or more contributor license agreements. See the NOTICE file
+    distributed with this work for additional information
+    regarding copyright ownership. The ASF licenses this file
+    to you under the Apache License, Version 2.0 (the
+    "License"); you may not use this file except in compliance
+    with the License. You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+    Unless required by applicable law or agreed to in writing,
+    software distributed under the License is distributed on an
+    "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+    KIND, either express or implied. See the License for the
+    specific language governing permissions and limitations
+    under the License.
+
+-->
+<databaseChangeLog xmlns="http://www.liquibase.org/xml/ns/dbchangelog"
+                   xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"
+                   xsi:schemaLocation="http://www.liquibase.org/xml/ns/dbchangelog
+                   http://www.liquibase.org/xml/ns/dbchangelog/dbchangelog-4.1.xsd">
+    <changeSet author="fineract" id="1">
+        <insert tableName="r_enum_value">
+            <column name="enum_name" value="transaction_type_enum"/>
+            <column name="enum_id" valueNumeric="40"/>
+            <column name="enum_message_property" value="Buy Down Fee"/>
+            <column name="enum_value" value="Buy Down Fee"/>
+            <column name="enum_type" valueBoolean="false"/>
+        </insert>
+    </changeSet>
+    <changeSet author="fineract" id="2">
+        <insert tableName="r_enum_value">
+            <column name="enum_name" value="transaction_type_enum"/>
+            <column name="enum_id" valueNumeric="41"/>
+            <column name="enum_message_property" value="Buy Down Fee Adjustment"/>
+            <column name="enum_value" value="Buy Down Fee Adjustment"/>
+            <column name="enum_type" valueBoolean="false"/>
+        </insert>
+    </changeSet>
+</databaseChangeLog>

integration-tests/src/test/java/org/apache/fineract/integrationtests/LoanBuyDownFeeTest.java

@@ -0,0 +1,264 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.integrationtests;
+
+import static org.junit.jupiter.api.Assertions.assertEquals;
+import static org.junit.jupiter.api.Assertions.assertNotNull;
+import static org.junit.jupiter.api.Assertions.assertTrue;
+
+import java.math.BigDecimal;
+import java.util.List;
+import java.util.UUID;
+import lombok.extern.slf4j.Slf4j;
+import org.apache.fineract.client.models.GetLoansLoanIdResponse;
+import org.apache.fineract.client.models.GetLoansLoanIdTransactions;
+import org.apache.fineract.client.models.PostLoanProductsRequest;
+import org.apache.fineract.client.models.PostLoanProductsResponse;
+import org.apache.fineract.client.models.PostLoansLoanIdTransactionsRequest;
+import org.apache.fineract.client.models.PostLoansLoanIdTransactionsResponse;
+import org.apache.fineract.client.models.PostLoansResponse;
+import org.apache.fineract.integrationtests.common.ClientHelper;
+import org.apache.fineract.integrationtests.common.Utils;
+import org.apache.fineract.integrationtests.common.accounting.Account;
+import org.apache.fineract.integrationtests.common.loans.LoanTestLifecycleExtension;
+import org.junit.jupiter.api.BeforeEach;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.api.extension.ExtendWith;
+
+/**
+ * Integration tests for Buy Down Fee functionality in Progressive Loans
+ */
+@Slf4j
+@ExtendWith({ LoanTestLifecycleExtension.class })
+public class LoanBuyDownFeeTest extends BaseLoanIntegrationTest {
+
+    private Long clientId;
+    private Long loanId;
+
+    // Buy Down Fee accounts for accrual-based accounting
+    private final Account buyDownExpenseAccount = accountHelper.createExpenseAccount();
+    private final Account deferredIncomeLiabilityAccount = accountHelper.createLiabilityAccount();
+
+    // Additional receivable accounts required for accrual-based accounting
+    private final Account interestReceivableAccount = accountHelper.createAssetAccount();
+    private final Account feeReceivableAccount = accountHelper.createAssetAccount();
+    private final Account penaltyReceivableAccount = accountHelper.createAssetAccount();
+
+    @BeforeEach
+    public void beforeEach() {
+        runAt("01 September 2024", () -> {
+            clientId = clientHelper.createClient(ClientHelper.defaultClientCreationRequest()).getClientId();
+            final PostLoanProductsResponse loanProductsResponse = loanProductHelper
+                    .createLoanProduct(createProgressiveLoanProductWithBuyDownFee());
+
+            // Apply for the loan with proper progressive loan settings
+            PostLoansResponse postLoansResponse = loanTransactionHelper.applyLoan(applyLP2ProgressiveLoanRequest(clientId,
+                    loanProductsResponse.getResourceId(), "01 September 2024", 1000.0, 10.0, 12, null));
+            loanId = postLoansResponse.getLoanId();
+            loanTransactionHelper.approveLoan(loanId, approveLoanRequest(1000.0, "01 September 2024"));
+            disburseLoan(loanId, BigDecimal.valueOf(1000.0), "01 September 2024");
+        });
+    }
+
+    @Test
+    public void testBuyDownFeeOnProgressiveLoan() {
+        runAt("02 September 2024", () -> {
+            // Verify loan product has buy down fee enabled
+            final GetLoansLoanIdResponse loanDetailsBeforeTransaction = loanTransactionHelper.getLoanDetails(loanId);
+            assertNotNull(loanDetailsBeforeTransaction);
+            log.info("Loan Product: {}", loanDetailsBeforeTransaction.getLoanProductName());
+
+            // Create buy down fee transaction
+            Long buyDownFeeTransactionId = addBuyDownFeeForLoan(loanId, 500.0, "02 September 2024");
+
+            assertNotNull(buyDownFeeTransactionId);
+
+            // Verify transaction was created in loan details
+            final GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanId);
+            assertNotNull(loanDetails);
+
+            // Find the buy down fee transaction
+            boolean buyDownFeeFound = false;
+            for (GetLoansLoanIdTransactions transaction : loanDetails.getTransactions()) {
+                if (transaction.getType() != null && transaction.getType().getId() != null && transaction.getType().getId().equals(40L)) {
+                    buyDownFeeFound = true;
+                    assertEquals(0, BigDecimal.valueOf(500.0).compareTo(transaction.getAmount()));
+                    assertEquals(Long.valueOf(40), transaction.getType().getId());
+                    assertEquals("Buy Down Fee", transaction.getType().getValue());
+                    break;
+                }
+            }
+            assertTrue(buyDownFeeFound, "Buy down fee transaction should be found in loan transactions");
+        });
+    }
+
+    @Test
+    public void testBuyDownFeeWithNote() {
+        runAt("03 September 2024", () -> {
+            String externalId = UUID.randomUUID().toString();
+            String noteText = "Buy Down Fee - Test Note";
+
+            PostLoansLoanIdTransactionsResponse response = loanTransactionHelper.makeLoanBuyDownFee(loanId,
+                    new PostLoansLoanIdTransactionsRequest().dateFormat(DATETIME_PATTERN).transactionDate("03 September 2024").locale("en")
+                            .transactionAmount(250.0).externalId(externalId).note(noteText));
+
+            assertNotNull(response.getResourceId());
+
+            // Verify transaction details
+            final GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanId);
+            GetLoansLoanIdTransactions buyDownFeeTransaction = loanDetails.getTransactions().stream()
+                    .filter(t -> t.getType() != null && t.getType().getId() != null && t.getType().getId().equals(40L))
+                    .filter(t -> externalId.equals(t.getExternalId())).findFirst().orElse(null);
+
+            assertNotNull(buyDownFeeTransaction, "Buy down fee transaction should exist");
+            assertEquals(0, BigDecimal.valueOf(250.0).compareTo(buyDownFeeTransaction.getAmount()));
+            assertEquals(externalId, buyDownFeeTransaction.getExternalId());
+        });
+    }
+
+    @Test
+    public void testMultipleBuyDownFees() {
+        runAt("04 September 2024", () -> {
+            // Add first buy down fee
+            Long firstBuyDownFeeId = addBuyDownFeeForLoan(loanId, 200.0, "04 September 2024");
+
+            // Add second buy down fee
+            Long secondBuyDownFeeId = addBuyDownFeeForLoan(loanId, 150.0, "04 September 2024");
+
+            assertNotNull(firstBuyDownFeeId);
+            assertNotNull(secondBuyDownFeeId);
+
+            // Verify both transactions exist
+            final GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanId);
+            long buyDownFeeCount = loanDetails.getTransactions().stream()
+                    .filter(t -> t.getType() != null && t.getType().getId() != null && t.getType().getId().equals(40L)).count();
+
+            assertEquals(2, buyDownFeeCount, "Should have 2 buy down fee transactions");
+        });
+    }
+
+    @Test
+    public void testBuyDownFeeAccountingEntries() {
+        runAt("04 September 2024", () -> {
+            // Add Buy Down fee transaction
+            Long buyDownFeeTransactionId = addBuyDownFeeForLoan(loanId, 250.0, "04 September 2024");
+            assertNotNull(buyDownFeeTransactionId);
+
+            final GetLoansLoanIdResponse loanDetails = loanTransactionHelper.getLoanDetails(loanId);
+            GetLoansLoanIdTransactions buyDownFeeTransaction = loanDetails.getTransactions().stream()
+                    .filter(t -> t.getType() != null && t.getType().getId() != null && t.getType().getId().equals(40L))
+                    .filter(t -> buyDownFeeTransactionId.equals(t.getId())).findFirst().orElse(null);
+
+            assertNotNull(buyDownFeeTransaction, "Buy down fee transaction should exist");
+            assertEquals(0, BigDecimal.valueOf(250.0).compareTo(buyDownFeeTransaction.getAmount()));
+
+            verifyTRJournalEntries(buyDownFeeTransactionId, debit(buyDownExpenseAccount, 250.0), // DR: Buy Down Expense
+                    credit(deferredIncomeLiabilityAccount, 250.0) // CR: Deferred Income Liability
+            );
+
+            log.info("Buy Down Fee transaction created successfully (accounting validation pending client model regeneration)");
+        });
+    }
+
+    @Test
+    public void testBuyDownFeeValidation() {
+        runAt("05 September 2024", () -> {
+            // Test with negative amount (should fail)
+            try {
+                PostLoansLoanIdTransactionsResponse response = loanTransactionHelper.makeLoanBuyDownFee(loanId,
+                        new PostLoansLoanIdTransactionsRequest().dateFormat(DATETIME_PATTERN).transactionDate("05 September 2024")
+                                .locale("en").transactionAmount(-100.0).note("Invalid negative amount"));
+                assertTrue(false, "Buy down fee with negative amount should have failed");
+            } catch (Exception e) {
+                // Expected: validation should prevent negative amounts
+                log.info("Expected validation error for negative amount: {}", e.getMessage());
+            }
+
+            // Test with zero amount (should fail)
+            try {
+                PostLoansLoanIdTransactionsResponse response = loanTransactionHelper.makeLoanBuyDownFee(loanId,
+                        new PostLoansLoanIdTransactionsRequest().dateFormat(DATETIME_PATTERN).transactionDate("05 September 2024")
+                                .locale("en").transactionAmount(0.0).note("Invalid zero amount"));
+                assertTrue(false, "Buy down fee with zero amount should have failed");
+            } catch (Exception e) {
+                // Expected: validation should prevent zero amounts
+                log.info("Expected validation error for zero amount: {}", e.getMessage());
+            }
+        });
+    }
+
+    /**
+     * Creates a progressive loan product with buy down fee enabled
+     */
+    private PostLoanProductsRequest createProgressiveLoanProductWithBuyDownFee() {
+        // Create a progressive loan product with accrual-based accounting and proper GL mappings
+        return new PostLoanProductsRequest().name(Utils.uniqueRandomStringGenerator("BUY_DOWN_FEE_PROGRESSIVE_", 6))
+                .shortName(Utils.uniqueRandomStringGenerator("", 4)).description("Progressive loan product with buy down fee enabled")
+                .includeInBorrowerCycle(false).useBorrowerCycle(false).currencyCode("USD").digitsAfterDecimal(2).principal(1000.0)
+                .minPrincipal(100.0).maxPrincipal(10000.0).numberOfRepayments(12).minNumberOfRepayments(6).maxNumberOfRepayments(24)
+                .repaymentEvery(1).repaymentFrequencyType(RepaymentFrequencyType.MONTHS_L).interestRatePerPeriod(10.0)
+                .minInterestRatePerPeriod(0.0).maxInterestRatePerPeriod(120.0).interestRateFrequencyType(InterestRateFrequencyType.YEARS)
+                .amortizationType(AmortizationType.EQUAL_INSTALLMENTS).interestType(InterestType.DECLINING_BALANCE)
+                .interestCalculationPeriodType(InterestCalculationPeriodType.DAILY).allowPartialPeriodInterestCalcualtion(false)
+                .transactionProcessingStrategyCode("advanced-payment-allocation-strategy")
+                .paymentAllocation(List.of(createDefaultPaymentAllocation("NEXT_INSTALLMENT"))).creditAllocation(List.of())
+                .daysInMonthType(30).daysInYearType(360).isInterestRecalculationEnabled(false).accountingRule(3) // Accrual-based
+                                                                                                                 // accounting
+                // GL Account Mappings for Accrual-Based Accounting
+                .fundSourceAccountId(fundSource.getAccountID().longValue())
+                .loanPortfolioAccountId(loansReceivableAccount.getAccountID().longValue())
+                .transfersInSuspenseAccountId(suspenseAccount.getAccountID().longValue())
+                .interestOnLoanAccountId(interestIncomeAccount.getAccountID().longValue())
+                .incomeFromFeeAccountId(feeIncomeAccount.getAccountID().longValue())
+                .incomeFromPenaltyAccountId(penaltyIncomeAccount.getAccountID().longValue())
+                .incomeFromRecoveryAccountId(recoveriesAccount.getAccountID().longValue())
+                .writeOffAccountId(writtenOffAccount.getAccountID().longValue())
+                .overpaymentLiabilityAccountId(overpaymentAccount.getAccountID().longValue())
+                // Receivable accounts required for accrual-based accounting
+                .receivableInterestAccountId(interestReceivableAccount.getAccountID().longValue())
+                .receivableFeeAccountId(feeReceivableAccount.getAccountID().longValue())
+                .receivablePenaltyAccountId(penaltyReceivableAccount.getAccountID().longValue())
+                .buyDownExpenseAccountId(buyDownExpenseAccount.getAccountID().longValue())
+                .incomeFromBuyDownAccountId(feeIncomeAccount.getAccountID().longValue())
+                .deferredIncomeLiabilityAccountId(deferredIncomeLiabilityAccount.getAccountID().longValue()).loanScheduleType("PROGRESSIVE")
+                .loanScheduleProcessingType("HORIZONTAL").enableBuyDownFee(true)
+                .buyDownFeeCalculationType(PostLoanProductsRequest.BuyDownFeeCalculationTypeEnum.FLAT)
+                .buyDownFeeStrategy(PostLoanProductsRequest.BuyDownFeeStrategyEnum.EQUAL_AMORTIZATION)
+                .buyDownFeeIncomeType(PostLoanProductsRequest.BuyDownFeeIncomeTypeEnum.FEE).locale("en").dateFormat("dd MMMM yyyy");
+    }
+
+    /**
+     * Helper method to add buy down fee for a loan
+     *
+     * @param loanId
+     *            the ID of the loan to add the buy down fee to
+     * @param amount
+     *            the amount of the buy down fee
+     * @param date
+     *            the transaction date in format specified by DATETIME_PATTERN
+     * @return the ID of the created buy down fee transaction
+     */
+    private Long addBuyDownFeeForLoan(Long loanId, Double amount, String date) {
+        String buyDownFeeExternalId = UUID.randomUUID().toString();
+        PostLoansLoanIdTransactionsResponse response = loanTransactionHelper.makeLoanBuyDownFee(loanId,
+                new PostLoansLoanIdTransactionsRequest().dateFormat(DATETIME_PATTERN).transactionDate(date).locale("en")
+                        .transactionAmount(amount).externalId(buyDownFeeExternalId).note("Buy Down Fee Transaction"));
+        return response.getResourceId();
+    }
+}

integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanProductTestBuilder.java

@@ -166,6 +166,8 @@ public class LoanProductTestBuilder {
     private List<String> supportedInterestRefundTypes = null;
     private String chargeOffBehaviour;
     private boolean interestRecognitionOnDisbursementDate = false;
+    private Boolean enableBuyDownFee = false;
+    private String buyDownFeeCalculationType;
 
     public String build() {
         final HashMap<String, Object> map = build(null, null);
@@ -341,6 +343,14 @@ public class LoanProductTestBuilder {
             map.put("chargeOffBehaviour", chargeOffBehaviour);
         }
 
+        if (this.enableBuyDownFee != null) {
+            map.put("enableBuyDownFee", this.enableBuyDownFee);
+        }
+
+        if (this.buyDownFeeCalculationType != null) {
+            map.put("buyDownFeeCalculationType", this.buyDownFeeCalculationType);
+        }
+
         return map;
     }
 
@@ -906,4 +916,13 @@ public class LoanProductTestBuilder {
         }
     }
 
+    public LoanProductTestBuilder withEnableBuyDownFee(final Boolean enableBuyDownFee) {
+        this.enableBuyDownFee = enableBuyDownFee;
+        return this;
+    }
+
+    public LoanProductTestBuilder withBuyDownFeeCalculationType(final String buyDownFeeCalculationType) {
+        this.buyDownFeeCalculationType = buyDownFeeCalculationType;
+        return this;
+    }
 }

integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanTransactionHelper.java

@@ -3049,6 +3049,10 @@ public class LoanTransactionHelper {
         return Calls.ok(FineractClientHelper.getFineractClient().loanTransactions.executeLoanTransaction(loanId, request, "downPayment"));
     }
 
+    public PostLoansLoanIdTransactionsResponse makeLoanBuyDownFee(Long loanId, PostLoansLoanIdTransactionsRequest request) {
+        return Calls.ok(FineractClientHelper.getFineractClient().loanTransactions.executeLoanTransaction(loanId, request, "buyDownFee"));
+    }
+
     public List<AdvancedPaymentData> getAdvancedPaymentAllocationRules(final Integer loanId) {
         return Calls.ok(FineractClientHelper.getFineractClient().legacy.getAdvancedPaymentAllocationRulesOfLoan(loanId.longValue()));
     }