Are you a first-time homebuyer who is low on cash and looking for an affordable mortgage? Then have a look at these mortgages that can help you become a homeowner with little to no money down, plus other money-saving perks.
Community Affordable Loan Solution (Bank of America)
Bank of America recently made the news with the announcement of its Community Affordable Loan Solution. The new mortgage product makes homebuying much more accessible to those who used to only dream of buying a house since it eliminates the need for a down payment, closing costs, and mortgage insurance. And instead of having a minimum credit score requirement, this mortgage factors in your past phone, utility, auto insurance, and rent payments to determine creditworthiness.
The downside to the Community Affordable Loan Solution is its limited availability. At the moment, only historically Black and Hispanic neighborhoods have access to the program in these cities: Dallas, Detroit, Charlotte, Miami, and Los Angeles.
Beyond meeting the location requirement, you will need to complete a homebuyer certification course and meet the income limits.
American Dream Mortgage (US Bank)
You could get a mortgage via the American Dream Mortgage program if you have no credit score by using non-traditional methods to measure creditworthiness. And if you do have a credit score, it won’t have to be too high, as a 460 can help you qualify.
The American Dream Mortgage requires a three percent minimum down payment but no mortgage insurance. You may not need much cash to get a home via this loan, though, as it offers up to $10,000 in down payment, closing cost, and other expense assistance. As long as you can come up with $1,000 of your own cash at closing, you should be good to go.
PNC Community Loan (PNC Bank)
If you can come up with three percent for a down payment, you may want to consider the PNC Community Loan. It waives the need for mortgage insurance and has relaxed requirements that can make it easier to qualify compared to more traditional home loans.
Meet the income limits or live in an area of low to moderate income, and you could get a $5,000 grant towards your closing costs to keep more cash in your pocket for eventual home repairs or improvements.
Dream. Plan. Home. Mortgage (Wells Fargo)
The cons to this mortgage for first-time homebuyers are that you’ll need a three percent minimum down payment and mortgage insurance. The pros are that you can get accepted with a limited credit history or a low score. Combine the mortgage with Wells Fargo’s Closing Cost Credit that’s available in certain areas, and you could get as much as $5,000 towards your closing costs.
HomeRun Mortgage (Citibank)
Like Bank of America’s Community Affordable Loan Solution, the HomeRun Mortgage from Citibank helps those living in majority Black and Hispanic neighborhoods in select cities, such as Dallas, Atlanta, Philadelphia, Houston, Denver, Cambridge, and Austin. The minimum down payment is three percent, but if you want to apply with non-traditional credit, that amount jumps to five percent.
The HomeRun Mortgage does not require mortgage insurance. You may qualify for up to $7,5000 in closing cost assistance.