Fifth Third Mortgage is the latest lender to enter the slowly growing arena of mortgage lenders offering low down mortgages, taking it a step further by announcing — for those who qualify — a zero down payment mortgage program.
Its down payment assistance program offers 3% of the purchase price in down payment assistance, up to $3,600, for low-income borrowers or those purchasing in a designated low-income area and financed through Fifth Third.
Similar to others in the space, Fifth Third’s program is paired with Freddie Mac’s Home Possible Advantage Mortgage, a product with a 3% down payment and reduced mortgage insurance premiums.
While borrowers don’t need to be first-time buyers, Fifth Third’s fine print states that borrowers must be “either located in a Low Income Census Tract or borrower must meet the low income limit threshold based on the qualifying income per FFIEC website. Down payment assistance may be taxable as income and reported to the IRS. Consult your tax advisor.”
It's not accessible to everyone across the U.S. though. The program is only available in the bank’s 10-state footprint, which includes Michigan, Indiana, Illinois, Kentucky, Tennessee, Ohio, West Virginia, North Carolina, Georgia and Florida.
Fifth Third said that it plans to keep the product at least through the end of the year and potentially through 2017.
“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.”
Both Quicken Loans and Guaranteed Rate recently announced 1% down programs, and while they’re not zero down, they’re still low.
This is on top of Bank of America, Wells Fargo, JPMorgan Chase, and many other major lenders already launched into 3% down loan programs earlier this year.
And the entity behind most of these low down payment programs? Freddie Mac.
The government-sponsored enterprise and U.S. Bank partnered with HousingWire on a recent webinar titled, “The secret to closing more 3% down mortgages,” back in March. Since then, lenders have slowly rolled out 3% and lower mortgage programs backed by Freddie, finally helping give a strong push toward putting more people into home.
