Fifth Third Mortgage recently announced a new payment assistance program aimed at helping consumers purchase homes specifically in low-income areas.
“No homebuyer wants to pay more than they need to, yet each year, thousands of homebuyers miss out on down payment and closing cost assistance,” a release from the Cincinnati-based bank states.
“We want to help build strong communities,” said Chad Borton, head of the Consumer Bank and executive vice president for Fifth Third Bancorp. “We know that making homes affordable is one of the best ways we can help improve our neighborhoods.”
The Down Payment Assistance Program offers 3 percent of the purchase price in down payment assistance, up to $3,600, for low-income borrowers or those purchasing in designated low-income areas.
The program is paired with the Freddie Mac Home Possible Advantage Mortgage which offers 3 percent down payments and reduced mortgage insurance premiums.
And, the program can be combined with other state and local programs to help homebuyers take advantage of as much free money as they can for their down payments.
The $3,600 in down payment assistance does not have to be repaid but may count as income for tax purposes.
Low-income neighborhoods in Columbus include Franklinton, the Hilltop, Linden and the King Lincoln District.
In order to qualify for the program, buyers must make less than half of the area’s median income but they need not be first-time homebuyers. In Franklin County, that means no more than $34,543 in annual income.
The program is accessible to homebuyers who finance through Fifth Third in the bank’s 10-state footprint which includes Ohio, Michigan, Indiana, Illinois, Kentucky, Tennessee, West Virginia, North Carolina, Georgia and Florida.
The bank is just one in a recent spate of mortgage providers to offer mortgage assistance, though it is unique in that it potentially eliminates out-of-pocket costs for low-income buyers.
Both Quicken Loans and Guaranteed Rate recently announced 1 percent down payment programs for borrowers and Bank of America, Wells Fargo, JPMorgan Chase and other lenders launched into 3 percent programs earlier this year.
Freddie Mac is behind most of those initiatives. According to HousingWire, the government-sponsored entity aired a webinar titled “The secret to closing more 3 percent down mortgages” back in March.
“Since then, lenders have slowly rolled out 3 percent and lower mortgage programs backed by Freddie, finally helping give a strong punch toward putting more people into a home,” HousingWire reports.
Fifth Third also offers its Community Reinvestment Mortgage Special which helps pay closing costs on homes purchased in low-income areas no matter the buyer’s income level. That offer, however, may not be combined with the down payment assistance program.