“Quicken quietly offers 1% down payment loans”
Just received this news from floridarealtors.org and I thought it was to good not to pass on…… so here it is!
Quicken Loans has been fairly hush about it’s latest offering of super low down payment mortgage, even as rival bank giants like Bank of America, Wells Fargo and JPMorgan Chase all tout their new 3 % down mortgage products. But late last year, Quicken Loans quietly began offering 1% down payment mortgages.
The program emerged from a partnership between Quicken and Freddie Mac in October 2015 and was structured as part of Freddie Mac’s Home Possible Advantage program, which requires 3% down payment.
However, Quicken Loans offers its customers a 1% down because it grants the extra money to the borrower. Their Vice President, Bill Banfield of capital markets, told Housing Wire in an interview. “We require 1% from a consumer and we give the consumer a 2% grant, so the client has 3% equity immediately,” Banfield told Housing Wire.
The 1% down payment loans are available only for those purchasing a home and they can only be used on a single-family home or condo – second home and investment properties or co-ops aren’t included. They must have a FICO score of 680 or above and earn less than the median income for their county. Their debt-to-income ratio must be 45 % or less.
“We want to try to help people and do it in a smart way.” Banfield told Housing Wire, “For us, it was really a question of, if you want to provide access to credit, how do you do it responsibly? How can you help people”? If first-time buyers are struggling, are there smart ways to help them while still balancing access to credit”? We wanted to have a conventional option to get people into more homes”.