As part of a lending discrimination settlement with the Department of Justice, City National Bank has created a $29.5 million fund to help marginalized communities get into the home-buying market.
The Los Angeles-based bank on Sept. 12 launched its Ladder Up Home Loan Program, which requires just a 3% downpayment while also providing downpayment grants for homebuyers in majority-Black and Hispanic neighborhoods across Southern California.
To help with costs, borrowers also get to skip the standard mortgage insurance requirement typically applied to those who put less than 20% down. Yes, you read that right: No PMI!
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Grants available through Ladder Up amount to 3% of the mortgage for a maximum of $15,000 to help with a down payment, closing costs or a mortgage rate buydown.
The program’s maximum loan amounts mirror those at Fannie Mae for six Southern California counties, according to Vanessa Montañez, senior vice president and head of community lending at CNB.
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Here’s what that looks like in the region’s qualifying census tracts:
—Oxnard-Thousand Oaks-Ventura’s maximum loan amount is $948,750.
—Los Angeles County and Orange County max out at $1,089,300.
—Riverside-San Bernardino-Ontario cap at $726,200.
—San Diego-Chula Vista-Carlsbad tops out at $977,500.
The cherry on top is a competitive mortgage rate for a 30-year fixed. “It’s 6.9% to 7% and no points,” said Montañez. The lowest middle FICO score allowed is 680.
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Now, let’s compare CNB’s program to mortgage giant Freddie Mac.
This week Freddie Mac’s average conforming mortgage rate posted 7.18% on loan amounts to $726,200.
Freddie Mac no longer tracks points in its survey and it never tracks so-called high balance or agency jumbo…
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