Bank of America Corp. has partnered with a credit union and Freddie Mac to offer an affordable lending program with no mortgage insurance.
The Charlotte, North Carolina-based bank announced Monday the Affordable Loan Solution for low- and moderate-income homebuyers.
Prospective borrowers must complete counseling to gain access to the product, which is being offered though BofA’s in-house
loan originators.
The program was created in partnership with Self-Help Ventures Fund, which will acquire the closed loans and mortgage servicing rights.
Self-Help, a non-profit loan fund operated by Self-Help Credit Union, was recently approved as a seller-servicer by Freddie — which will purchase all loans originated through the program.
Down payments are as low as 3 percent on owner-occupied single-family properties, and no reserve funds are generally required.
Affordable second mortgages, grants and cash on hand can be utilized for the down payment.
Non-traditional credit will be considered for credit history.
The standard conforming loan limit of $417,000 will apply to loans closed through the program.
Applicant income is limited the the area median income as defined by the Department of Housing and Urban Development.
Counseling is handled through BofA’s Connect to Own nationwide network of counselors.
MaryClaire Cieply, a spokeswoman for BofA, indicated in a telephone call that no mortgage insurance is required for the program.
“The Affordable Loan Solution mortgage program will include an extensive quality control routine with Freddie Mac that promotes responsible underwriting and reduces potential risks to Bank of America and Freddie Mac,”
the statement said.
