Bank of America Expands the Affordable Loan Solution Program
to Help Low- and Moderate-Income (LMI) Homebuyers
Last update: 20/10/2016 7:00:00 am
Expansion Follows Successful First Six Months in Partnership With Self-Help and Freddie Mac to Promote Responsible Lending
CHARLOTTE, N.C.--(BUSINESS WIRE)--October 20, 2016--
Bank of America, in partnership with Self-Help Ventures Fund and Freddie Mac (OTCQB: FMCC), announced the doubling of its annual commitment to its Affordable Loan Solution(TM) mortgage program from $500 million to $1 billion, ensuring continued support for an innovative mortgage program that has provided more than 90 percent of its recipients first-time homeownership financing.
"Since our introduction in February, the Affordable Loan Solution program has been meeting the needs of LMI borrowers who desire a responsible mortgage product at an affordable entry point," said D. Steve Boland, Consumer Lending executive, Bank of America. "We're especially proud of how the Affordable Loan Solution program has become a popular choice for creditworthy first-time homebuyers, many of whom live in underserved communities."
This year, Bank of America is enhancing the mortgage experience for clients who qualify for an Affordable Loan Solution mortgage, including automated underwriting and improving cycle times.
The Affordable Loan Solution mortgage program allows down payments as low as 3 percent on the purchase of a primary, single-family residence, with no reserve funds required in most situations. Customers are not required to pay mortgage insurance. Borrowers may use secondary financing, such as an affordable second loan, grants, or even cash they have on hand. The program also considers non-traditional forms of credit to demonstrate credit history. Loan amounts must be within conforming loan limits (up to $417,000), and applicants' income cannot exceed 100 percent of the HUD area median income. Applicants must occupy the property, and first-time buyers must participate in homebuyer education through a HUD-approved housing counseling agency.
The Affordable Loan Solution mortgage program is offered through all Bank of America mortgage sales channels, including mortgage loan officers in offices across the country, 4,700 financial centers, bankofamerica.com, and mortgage experts by phone.
The Affordable Loan Solution mortgage program evolved from a partnership involving Bank of America, Self-Help and Freddie Mac. Bank of America mortgage loan officers, based in home loans offices and financial centers across the country, work directly with homebuyers to originate the loans. The bank sells the loans, including servicing rights, to Self-Help, which provides post-closing counseling for any borrowers who might be experiencing payment difficulties. Loan servicing immediately transfers after origination to Self-Help's designated specialty servicer, who is handling all loans regardless of future performance.
Freddie Mac collaborated with Self-Help and Bank of America to define credit terms and approved Self-Help as a seller/servicer to facilitate the rollout of this offering to borrowers. Freddie Mac is purchasing all of the eligible Affordable Loan Solution mortgages originated via the Self-Help and Bank of America partnership.
The Affordable Loan Solution mortgage program includes an extensive quality control routine with Freddie Mac that promotes responsible underwriting and reduces potential risks to Bank of America and Freddie Mac.
Click here for more information about the Affordable Loan Solution mortgage program, or speak with a mortgage expert at 1.800.781.0242.
