Prudential CA/NV/TX Realty is offering a 103 percent loan-to-value loan product designed for Hispanic home buyers in Northern California.

The loan is only offered in Northern California and was developed by the Home Loan Group in a joint venture with Chase Home Finance.

“After conducting an internal study of the Hispanic market, we saw significant gaps between the type of loan products currently available and what is an underserved market,” said Ed Krafchow, president of Prudential CA/NV/TX Realty. Krafchow said his company shared the information with The Home Loan Group and the two developed the loan geared to Hispanic buying trends.

The 103 percent LTV loan was designed to help Hispanic home buyers move beyond the hurdle of an 80 percent conventional loan, according to Tom Borrelli, senior vice president of Chase Home Finance. Borrelli said the group is one of the youngest segments of California’s population.

California’s Hispanic home buyers spend an average of 28 percent of their monthly gross income toward qualifying income ratio, which includes principle mortgage, property tax and insurance payments, according to the California Association of Realtors’ 2004-2005 State of the Housing Market report. In contrast, non-Hispanic households only devote 24 percent of their monthly gross to PITI payments, according to the report.

The 103 percent LTV loan includes interest-only payments for the initial fixed 5-, 7- or 10-year period and financing of 100 percent of the purchase price plus 3 percent of closing costs for a total first-lien LTV of 103 percent.

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