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Special Reports
Downpayment Assistance Programs
Closing Cost Grants Assists Low-Mod Borrowers
Countrywide pledged $5 million in Texas.
By Amilda Dymi
Some lenders offer closing cost products, which serve as an alternative
financial source to downpayment.
Countrywide Financial Corp. here recently pledged to grant $5 million in funds earmarked to lend a hand to low-to-moderate
income homebuyers in Texas with closing cost assistance. In an effort to lower typical barriers to homeownership
such as downpayment and closing costs, executives said, Countrywide is offering up to $3,000 in home loan closing
cost assistance to eligible families in Dallas and the Fort Worth area.
Borrowers applying for a mortgage with Countrywide Bank, N.A. can qualify for free funds they may use for closing
costs associated with a mortgage loan, "including paying points to reduce the interest rate over the life
of the loan," the lender said. Grant funds are available through the 18 branch offices of Countrywide in the
Dallas-Fort Worth area.
"This new closing costs assistance program gives funds to low-to-moderate
income homebuyers and homeowners and residents in low-to-moderate income neighborhoods," Countrywide Bank
president and CEO, Jim Furash said.
When purchasing a home, homebuyers whose annual earnings fall into the low-income U.S. Census Bureau defined bracket
of about $30,000 to $32,000 (depending on the county), or who are purchasing property in neighborhoods recognized
as low-income areas, can qualify for up to $3,000 in closing cost grants. Families falling into the moderate-income
bracket earning between $49,000 to $52,000 annually, maybe eligible for up to $1,500 in closing cost funds. Regardless
of their income however, even families whose annual income is not low-to-moderate can qualify for closing cost
assistance if they purchase a property that is located in a low-income neighborhood.
In addition, the closing cost grant option is also available to families refinancing their existing home mortgages
for up to $1,500 for low-income families or neighborhoods and at $750 for those qualifying as moderate-income families
or neighborhoods in the area.
An additional reason why Countrywide is providing these options, Countrywide Home Loans regional senior vice president,
Mark Denis noted in a company release, is because, "As one of the largest employers in the Dallas/Fort Worth
Metroplex, Countrywide is eager to support its neighbors and enhance opportunities for homeownership and prosperity
among families who play such an important part in making Dallas a wonderful place to call home."
Similarly, to assist borrowers in affording a new mortgage on a new home in a higher interest rate marketplace
when homeowners tend to look at home equity lines of credit as a financial resource, DeepGreen Financial of Cleveland,
Ohio is offering a new home-equity loan that features no lender fees, annual fees or closing costs.
In response to rising rates, DGF said it has expanded its product offering by adding products such as fixed-rate
home equity loans and piggyback loans. Consumers can use piggyback loans for new home purchases in conjunction
with a first mortgage, DGF said, in addition to "a variety of variable-rate home equity lines of credit."
In addition to piggyback products, since in the current marketplace borrowers prefer not to refinance existing,
low-rate mortgages, DGF said, it offers a 30-year, fixed-rate home equity loan online direct to consumers on its
website. The loan is available to qualified borrowers at rates beginning at 7.375% and for loans of up to $250,000,
with payments that are amortized and repaid over the full 30-year term of the loan.
"By distributing monthly payments over 30 years, our new home equity loan
gives borrowers access to more of their equity with lower payments," said DGF CEO, Sy Naqvi. "More importantly,
borrowers can access the money they need without worrying about a balloon payment down the road."
DGFl is an online retail and wholesale lender specialized in home equity markets operating through various partners
and a network of over 2,500 mortgage brokers. Since its inception in 2000 DGF has originated over $5 billion in
home equity products.
It is a subsidiary of Lightyear Capital, a New York based private equity investment firm.
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