Chase Home Finance has partnered with a California real estate firm to offer a hybrid, high-LTV mortgage specifically targeted at Hispanics.
Prudential CA/NV/TX Realty announced it is now offering a 103% Loan-To-Value loan product designed to meet the needs of Hispanic homebuyers in Northern California. The loan was developed by The Home Loan Group, a joint venture with Chase.
The product was created based on information Prudential gathered from conducting an internal study of the Hispanic market. "We saw significant gaps between the type of loan products currently available and what is an underserved market," said Prudential president Ed Krafchow in the announcement.
The 103% LTV mortgage finances 100% of the purchase price plus an additional 3% in closing costs. It is structured in interest-only payments for an initial fixed 5-, 7-, or 10-year period.
A total first-lien loan size of $650,000 is permitted at 680 FICO with a 38% debt-to-income ratio. A 700 minimum FICO with 41% DTI would qualify for $500,000, the announcement said.
Thom Borrelli, Chase Home Finance vice president, commented that the loan allows "Hispanic homebuyers, one of the youngest segments of California's population, [to] move beyond their perceived hurdle of an 80% conventional loan. This is especially important in the expensive Northern California market."
California Hispanic borrowers spend an average of 28% of their monthly gross income toward principle mortgage, property tax and insurance payments, compared to only 24% in Non-Hispanic households, Prudential reported.