New Mortgage Rate Relief Program Makes Homeownership More Affordable

last updated on Friday, December 13, 2024 in Mortgage Partnership Finance

Launched in 2024, the Mortgage Rate Relief product was designed to make homeownership attainable for borrowers at or below 80% of the FHFA Underserved Areas Data, by permanently reducing their interest rate by approximately 2 percentage points lower than the current market rate.

Video Transcript: 

The Mortgage Rate Relief program concept really was birthed in recognizing that nationwide there is a housing affordability crisis.

The Mortgage Rate Relief program provides an interest rate of 2% below the standard going rate. It is targeted for individuals who are 80% area median income or below and with the current interest rates, it was prohibitive on either that entry level homeowner being able to buy a home or for some of the elderly people who as their taxes and insurance have increased, want to be able to refinance into a more affordable product.

New Market Bank is really committed to supporting our customers, people within our community. In marketing the product to our current customer base, but also our realtor and referral partners that we all work with, they were thrilled to have this type of product available and offer to their customers. What everybody struggles with in this market is affordability factor. Because prices of homes are so expensive, they gave us a tool - a product that most other lineage didn't have access to. We received direct calls from borrowers that are interested in the program. We received calls from realtors that have heard about it and want to know more about it and be able to access it. That tells me that there's a demand that's growing.

HomeStart® is a grant program where the borrower can get $15,000 to go towards down payment closing costs, helping them to get into the home.

The HomeStart program is our down payment assistance program. Unlike Mortgage Rate Relief, which is focused on reducing the monthly payment, HomeStart is focused on helping borrowers to accumulate enough money for the down payment. I was able to partner the HomeStart grant with the Mortgage Rate Relief program for one of my customers. She is a single mother of three and she was always wanting to buy a home. I was able to finance her, to get her down payment money and get her an affordable home loan.

She was able to move into a home and Clear Lake Bank was able to retain the servicing of the loan because she's comfortable with me, she lives in my community, I see her at the grocery store, I see her at basketball games. She needed that peace of mind that she was working with someone who had her best interests at heart. It is all about community. I would prefer that we retain the servicing of the loan so that if they have a problem, they're not calling a 1-800 number, they are calling me at Clear Lake Bank.

I think people can consider themselves lucky if within their career they have an opportunity to do something like this, where there's so much positive impact. This has been an absolutely amazing experience. It's been a fantastic team effort. The folks within our Bank have been amazing. Federal Home Loan Bank of Chicago's MPF Program Group® has been amazing and our PFIs have been unbelievable in terms of how they've adopted and embraced this program.

Federal Home Loan Bank and the community banks are a very tight knit community. Like we support each other. I think if you're not working with the Federal Home Loan Bank of Des Moines, you're missing something. And it's just something that fits well with a community bank environment. Their philosophies and our philosophies are very similar, and it's just really been probably a good partner. That's why I've worked with them for over 20 years.

TAGS

1. Affordable Housing Program
2. Holiday Message
3. Members and Products
4. Membership Benefits
5. Mortgage
6. Mortgage Rate Relief
7. MPF