Quicken quietly offers 1% downpayment loans

 

NEW YORK – June 29, 2016 – Quicken Loans has been fairly hush about its latest offering of a super low downpayment mortgage, even as rival bank giants like Bank of America, Wells Fargo and JPMorgan Chase all tout their new 3 percent down mortgage products. But late last year, Quicken Loans quietly began offering 1 percent downpayment 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 a 3 percent downpayment.

However, Quicken Loans offers its customers a 1 percent down because it grants the extra money to the borrower, Bill Banfield, Quicken Loans' vice president of capital markets, told HousingWire in an interview.

"We require 1 percent from a consumer and we give the consumer a 2 percent grant, so the client has 3 percent equity immediately," Banfield told HousingWire.

The 1 percent downpayment 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 percent or less.

"We want to try to help people and do it in a smart way," Banfield told HousingWire. "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."

Source: "Quicken Loans Now Offering 1% Down Mortgages," HousingWire (June 24, 2016)

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