Mortgage lender and servicer NewRez on Monday launched a special purpose credit program through Freddie Mac that will provide $3,000 or more in closing cost assistance to qualifying first-time homebuyers.
Freddie Mac’s BorrowSmart Access program will be available to NewRez borrowers through Caliber Home Loans‘ national network of branches.
The program offers $3,000 or more in closing cost assistance if borrowers in select metropolitan areas meet a minimum 3% downpayment, complete a one-on-one homeownership counseling, and earn less than or equal to 140% of the area median income (AMI).
“Our mission is to expand access to mortgage credit and advance economic opportunities for minorities and low- to moderate- income communities,” Baron Silverstein, President of Newrez said in a statement. “With BorrowSmart Access, we’re delivering on that mission by providing ways to reduce cost in the homebuying process.”
Borrowers can utilize additional sources of funds from gifts, family, and other approved down payment assistance programs to gain even more purchasing power, NewRez said in a statement.
BorrowSmart Access is available in 10 metropolitan areas across the United States, including:
- Atlanta-Sandy Springs-Alpharetta, Georgia
- Chicago-Naperville-Elgin, Illinois-Indiana-Wisconsin
- Detroit-Warren-Dearborn, Michigan
- El Paso, Texas
- Houston-The Woodlands-Sugar Land, Texas
- McAllen-Edinburg-Mission, Texas
- Memphis, Tennessee-Mississippi-Arkansas
- Miami-Fort Lauderdale-Pompano Beach, Florida
- Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland
- St. Louis, Missouri-Illinois
Program borrowers also need to meet the lender’s eligibility requirements, which typically include a minimum credit score of 620 and a maximum debt-to-income ratio of 50%.
For those who make between 50.01% and 80% of AMI, there is up to $1,250 worth of assistance available. The credit goes up to $2,500 if a borrower makes 50% or less of AMI. The special purpose credit program is an extension of the government sponsored enterprise’s equitable housing finance plan.
As part of its commitment to help low-income borrowers, Freddie Mac in April pledged to expand the use of special purpose credit programs (SPCPs), increase the availability of accessory dwelling units (ADUs) and manufactured homes, and launch a correspondent lending program to assist smaller financial institutions with access to Freddie Mac’s multifamily financing.
Freddie Mac’s DPA One, a down payment assistance digital platform, will also be made available broadly this year and complements Freddie Mac’s SPCP efforts.
Rocket Mortgage began offering the recently revamped BorrowSmart Access program in March. CrossCountry Mortgage, Guild Mortgage and several other lenders also began offering the program this year.