U.S. Bank announced a new Special Purpose Credit Program (SPCP) geared toward increasing homeownership in communities of color.
The Access Home Loan provides up to $12,500 in down payment assistance to qualified borrowers, as well as up to $5,000 in additional lender credit for closing costs. Buyers can opt to use the lender credit to buy down their interest rate, addressing a dire affordability problem in today’s high-rate environment.
It is currently available in pilot markets where the minority population is more than 50%. Those include Las Vegas, Little Rock, Milwaukee, Minneapolis, and St. Louis, as well as six California cities.
While the loan is designed for first-time buyers, other borrowers can qualify as well.
“We know that homeownership is the No. 1 way to build long-term wealth, but far too many minority families and individuals simply can’t come up with the upfront costs to buy a home,” said Lenny McNeill, EVP and National Head of Strategic Markets at U.S. Bank.
“There was a need that needed to be met. Our Access Home initiative, and now the U.S. Bank Access Home Loan, provide the level of financial support that can make sustainable homeownership a reality for underserved populations.”
The company has committed $100 million over the next five years to the program. It can be combined with other down payment assistance programs for even greater effect.
Borrowers just need to contribute a minimum of $1,000 from their own funds, and their income must be equal to or below the HUD Area Median Income in the area where they want to buy.
A FICO Score of at least 640 is typically necessary as well, though alternatives to credit like rent payments can be used to determine eligibility.