Brief: Flexible, or non-traditional, loan products can be employed to increase the feasibility of a home purchase.
Inglewood NHS Use of HOME Allocation as Second-Mortgage Funds, Inglewood, CA
Under the guidelines of this program, assistance was provided to qualified first-time homebuyers in the form of an equity participation loan, secured by a second deed of trust. The amount available was the minimum amount required to make an eligible property affordable to a particular household. The maximum subsidy was the difference between the amount of loan for which a borrower could qualify, based on income, and a sales price not to exceed 35 percent to 40 percent of the qualifying loan amount.
Wells Fargo Loan Products, Nationwide
Wells Fargo promoted various loan products designed to screen and approve qualified buyers who might have difficulty obtaining a mortgage loan under traditional criteria. Tools employed by Wells Fargo included 100% Financing with a 625 FICO score; a Builder donation program that provided 3% to a down payment and 3% to the closing cost; and Co-Borrower signing that allowed debt ratios of 55% versus a more traditional ratio of 45%.