Industry NewsMortgage

Wells Fargo targets first-time buyers with affordable mortgage program

Many of the loan's offerings mirror those offered by the FHA
  • Wells Fargo announced a new home loan option this week for first-time and low-income homebuyers, "yourFirst Mortgage."
  • Offering down payments as low as 3 percent and expanded credit scoring, the product is intended to reduce the number of barriers preventing qualified buyers and working families from purchasing a home.
  • As a conventional loan program, "your FirstMortgage" requires attention to the full documentation and underwriting process to confirm a borrower's ability to make payments.

Wells Fargo, the nation's largest mortgage lender, is introducing a new home loan program that emulates those offered by the Federal Housing Administration with a couple of buyer-friendly twists. Offering a down payment of as little as 3 percent (and up to 9.99 percent) for fixed-rate mortgages, the "yourFirst Mortgage" product replaces three separate government-sponsored enterprise loan options formerly offered through the bank for first-time and low-to-moderate income borrowers. Through this homogenization and consolidation of products, the bank is simplifying some of the extensive loan application hoops, a disadvantage of the other Fannie Mae and Freddie Mac programs such as HomeReady, to reduce the number of barriers preventing qualified buyers and working families from purchasing a home. “There are a lot of conventional loan products with low down payment options, but the criteria are so complex that it creates barriers for many qualified borrowers,” said Brad B...