Key Takeaways:
– loanDepot has introduced a new down payment assistance program called AccessZERO for FHA loan borrowers.
– The program offers a 10-year fully amortized repayable second mortgage as down payment assistance.
– Borrowers must have a minimum credit score of 600 to qualify, and the assistance can be up to 5% of the home purchase price or appraised value.
– The program is available nationwide for first-time and repeat homebuyers applying for FHA 30-year, fixed-rate purchase loans.
– loanDepot may also offer a rate buy-down option in the future.
– Other lenders, such as Rocket Mortgage, United Wholesale Mortgage, Guild Mortgage, and Guaranteed Rate, have also introduced down payment assistance programs.
– These programs typically involve a 3% down payment, with the lender paying 2% and the borrower contributing 1%.
– loanDepot’s program is offered through the Tule River Finance Authority, with no affiliation between the two companies.
– Making a smaller down payment may result in a higher mortgage rate, and FHA loans require upfront and annual mortgage insurance premiums.
HousingWire:
loanDepot has rolled out a new down payment assistance program for Federal Housing Administration (FHA) loan borrowers that enables them to put zero money down upfront.
In loanDepot’s program, dubbed AccessZERO, the down payment assistance is structured as a 10-year fully amortized repayable second mortgage.
Borrowers must have a minimum credit score of 600 to qualify for the down payment assistance, which can be as much as 5% of the home purchase price or appraised value, whichever is less.
The program is available nationwide through the retail channel for first-time and repeat homebuyers applying for FHA 30-year, fixed-rate purchase loans.
The lender is also considering offering a rate buy-down option soon, according to a spokesperson for the company.
In a recent interview with HousingWire, loanDepot CEO Frank Martell said the company is not chasing business that doesn’t make sense but trying “to make sure our focus is on the strategic growth areas that we think will contribute to the first-time homebuyer, diverse lending and affordable” lending.
Several lenders have rolled out down payment assistance programs recently, including Rocket Mortgage, United Wholesale Mortgage, Guild Mortgage and Guaranteed Rate.
In most cases, the product is essentially a conventional 3% down mortgage in which the lender pays 2% and the borrower puts just 1% down. Some lenders limit their share of the down payment to $4,000 or $5,000. Usually, the programs come from the lenders’ funds instead of working with a local nonprofit or a government-sponsored enterprise.
These programs function like a modification to Fannie Mae‘s HomeReady and Freddie Mac‘s HomePossible programs, which allow a 3% down payment — or what lenders refer to as 97% loan-to-value (LTV) — on conventional loans.
UWM launched Conventional 1% Down in April, Rocket rolled out the ONE+ program in May, and Guild started to offer its program in June. Guaranteed Rate joined the list in July with OneDown.
loanDepot said its down payment assistance program is offered by the Tule River Finance Authority and the companies are not affiliated.
The California-based lender noted that borrowers who make a smaller down payment will typically receive a higher mortgage rate. FHA loans also come with mandatory upfront and annual mortgage insurance premiums — usually for the life of the loan.
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Property Chomp’s Take:
loanDepot, a leading mortgage lender, has recently introduced a new down payment assistance program for borrowers of Federal Housing Administration (FHA) loans. This program, called AccessZERO, allows borrowers to put zero money down upfront when purchasing a home.
Under loanDepot’s AccessZERO program, the down payment assistance is structured as a 10-year fully amortized repayable second mortgage. To qualify for this assistance, borrowers must have a minimum credit score of 600. The assistance can be as much as 5% of the home purchase price or appraised value, whichever is less.
This program is available nationwide through loanDepot’s retail channel and is open to both first-time and repeat homebuyers who are applying for FHA 30-year, fixed-rate purchase loans. The lender is also considering offering a rate buy-down option in the near future.
In a recent interview with HousingWire, loanDepot CEO Frank Martell emphasized the company’s focus on strategic growth areas that contribute to first-time homebuyers, diverse lending, and affordable housing. The introduction of the AccessZERO program aligns with this goal and aims to help more individuals achieve their dream of homeownership.
loanDepot is not the only lender to roll out down payment assistance programs recently. Other lenders such as Rocket Mortgage, United Wholesale Mortgage, Guild Mortgage, and Guaranteed Rate have also introduced similar programs. These programs typically involve a conventional 3% down mortgage, where the lender pays 2%, and the borrower puts down only 1%. Some lenders may have a limit on their share of the down payment, often around $4,000 or $5,000. It is worth noting that these programs are funded by the lenders themselves rather than through partnerships with non-profit organizations or government-sponsored enterprises.
The AccessZERO program from loanDepot and other similar programs function similarly to Fannie Mae’s HomeReady and Freddie Mac’s HomePossible programs, which allow for a 3% down payment on conventional loans. These programs aim to make homeownership more accessible by reducing the initial down payment requirement.
It is important to consider that opting for a smaller down payment may result in a higher mortgage rate. Additionally, FHA loans typically require mandatory upfront and annual mortgage insurance premiums throughout the life of the loan.
loanDepot has partnered with the Tule River Finance Authority to offer its down payment assistance program, emphasizing that the companies are not affiliated.
Overall, loanDepot’s AccessZERO program provides an opportunity for FHA loan borrowers to purchase a home with zero money down upfront. This program, along with similar initiatives from other lenders, aims to support first-time homebuyers and make homeownership more attainable for a wider range of individuals.
