The idea that downpayment assistance can be a financially sound endeavor apparently is not dead. And who knew Wells Fargo & Co. is a believer.
Wells Fargo’s plan is to invest $170 million in a private-public collaboration that will provide sustainable housing support designed to help uplift the housing market in 20 cities affected by the economic downturn and the foreclosure crisis.
Its Neighborhood Lift and CityLift loans will make homeownership affordable to lower-income buyers in the area.
In Baltimore, CityLift is expected to support efforts to reduce the number of vacated homes and foreclosure sales. According to the city’s mayor, Stephanie Rawlings-Blake, CityLift complements Baltimore’s Vacants-to-Value initiative and supports efforts “to grow Baltimore by 10,000 families over the next 10 years.”
Wells Fargo plans to invest millions in DPA grants that will be distributed to homebuyers at up to $15,000 per loan in partnership with the City of Baltimore, NeighborWorks America and Neighborhood Housing Services of Baltimore.
The program, argues Wells Fargo’s regional president for Maryland, Andy Bertamini, offers an opportunity in times when “despite low home prices and historically low interest rates many families are still unable to purchase a home because they struggle with making the downpayment.”
The plan is to make homeownership affordable and reduce neighborhood blight.
The megabank said it has set aside $4.5 million to give the City of Baltimore a facelift. Wells Fargo will make available immediately $1 million in DPA grants that will be delivered through the Wells Fargo Baltimore CityLift Program.
To qualify prospective homeowners must meet income eligibility guidelines (at 120% of the median income for Baltimore), complete a homeowner education course and have signed a contract to buy a primary residence in the city of Baltimore.
During the second phase of the collaboration Wells Fargo will deliver the remaining $3.5 million by April during a local homebuyer event. No purchase of sale contract is necessary, yet applicants must complete the eight-hour homebuyer education program and close a mortgage loan in 90 days.
In addition, to ensure the Lift program is not seen as a way to generate new business to the bank, Wells has stated “the downpayment assistance may be applied to mortgage purchase loans with any lender,” if applicants meet the criteria.