Affordable mortgage program launched to help low, moderate income homebuyers
BALTIMORE Bank of America, in partnership with Self-Help Ventures Fund and Freddie Mac has announced the launch of its new Affordable Loan Solution™ mortgage, a conforming loan that provides low and moderate-income homebuyers access to a responsible lending product with counseling at affordable entry prices.
“There is a need in today’s marketplace for more responsible mortgage products that enable creditworthy homebuyers, who meet certain income limits and other requirements, to become homeowners at an affordable entry point with comprehensive counseling,” said D. Steve Boland, Consumer Lending executive, Bank of America. “Affordable Loan Solution combines Bank of America’s wide distribution network of mortgage professionals with the borrower support expertise of Self-Help and market liquidity provided by Freddie Mac to provide a new affordable loan option.”
The mortgage will be available through all of Bank of America mortgage sales channels, including mortgage loan officers in offices across the country, 4,700 financial centers, bankofamerica.com and mortgage experts by phone. Bank of America mortgage loan officers, based in home loans offices and financial centers across the country, will work directly with homebuyers to originate the loans.
The bank will sell the loans, including servicing rights, to Self-Help, which will provide post-closing counseling for any borrowers who might be experiencing payment difficulties. Loan servicing will be immediately transferred after origination to Self-Help’s designated specialty servicer, who will handle all loans regardless of future performance.
Freddie Mac collaborated with Self-Help and Bank of America to define credit terms and recently approved Self-Help as a seller/servicer to facilitate the rollout of this offering to borrowers. Freddie Mac will purchase all of the eligible affordable mortgages originated via the Self-Help and Bank of America partnership.
Affordable Loan Solution will allow down payments as low as three percent on the purchase of a primary, single-family residence, with no reserve funds required in most situations.
Borrowers may use secondary financing, such as an affordable second loan, grants, or even cash they have on hand. The program will also consider non-traditional forms of credit to demonstrate credit history.
Loan amounts will be within conforming loan limits (up to $417,000), and applicants’ income cannot exceed 100 percent of the HUD area median income.
Applicants must occupy the property, and first-time buyers will need to participate in homebuyer education through Bank of America’s Connect to Own® nationwide network of counselors.
Bank of America has a long tradition of providing information and access to homeownership opportunities to a wide variety of homebuyers. In fact, one of every three mortgages the company finances is to a low- or moderate-income homebuyer.
In addition, 30 percent of its loans are to multicultural borrowers, according to 2014 Home Mortgage Disclosure Act data released by the Federal Reserve.
Last March, the bank launched the Bank of America Down Payment
Resource Center, an online resource of more than 1,000 down payment and closing cost assistance programs. Taking a couple of minutes to answer fewer than five questions, prospective homebuyers can find out immediately which federal, state or local down payment and closing cost programs they may be eligible for.
The Affordable Loan Solution mortgage program includes an extensive quality control routine with Freddie Mac that promotes responsible underwriting and reduces potential risks to Bank of America and Freddie Mac.
For more information about the Affordable Loan Solution or other home loans options, consumers can speak with a mortgage expert at 1-800-781-0242.