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| Borrowers with little in the way of traditional credit may now qualify under a new loan program being tested in the nation’s capital.
A consortium of mortgage-related companies and organizations have committed to close up to $200 million in residential loans to an estimated 2,000 “thin-file” borrowers in Washington, D.C. The R-HOME program, which “represents an innovative and unique alliance between the public, private and nonprofit sectors,” was jointly announced today. CitiMortgage Inc., which “will furnish initial funding and servicing,” will provide 30-year fixed rate loans to borrowers with little or no credit history, the statement said. “We understand that just because potential borrowers do not have FICO scores, it does not mean they are not creditworthy,” Jackson C. Cosey Jr., an executive for Citi’s consumer lending group, said in the statement. “This program will have very high standards and is intended for individuals with proven track records of payment for other types of obligations.” The program will use The First American Corp.’s ANTHEM credit-evaluation model and underwriting technology developed by Just Price Solutions — with a final approval available in just days, according to the announcement. State Farm will invest $100 million, “which can be doubled through sales of loans to Fannie Mae.” In the pilot program, counseling will be provided by HomeFree-USA and Manna Mortgage. Nationally, counseling will be provided by a network of U.S. Housing and Urban Development-certified and trained counselors including NeighborWorks, HomeFree-USA, Opportunity Finance and Operation HOPE, the news release said. The group, which also includes Neighborhood Housing Services of America, estimated that nearly 7 million prospective borrowers nationally could benefit from such a program. |
