JPMorgan Chase has announced that they are implementing a new mortgage plan for first-time homebuyers who do not have the financial savings to put down a large down payment. The program is backed by Fannie Mae and will enable these buyers to qualify for and afford a mortgage.
This plan is similar to one that Bank of America introduced earlier this year. Both lenders will offer mortgages that require only three percent for a down payment. Neither bank's program is being run in conjunction with the Federal Housing Administration. This actually makes the loans somewhat more attractive, since a number of lenders have been chastised by the federal government for working with the FHA to make loans. A similar plan was announced by Wells Fargo earlier this week.
The program offered by Chase was not accompanied by a major announcement and marketing blitz. Instead, it was quietly implemented and only announced when it was noticed by a mortgage industry expert. Named the Standard Agency 97% program, it is designed to help those who have little cash on hand to cover the closing costs and down payment. They must be first-time homebuyers and need to have only three percent of the home price.
In cases of a loan where the loan-to-value ratio is between 95% and 97%, the down payment may be higher, but applicants can use gifted funds for anything over the first 3 percent.