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In a move to boost lending in minority communities, Wells Fargo will provide $10,000 in grants to help less affluent homebuyers in eight major metro areas make their down payments.
To qualify for the Homebuyer Access grants, which are being made through Wells Fargo’s existing special purpose credit program, homebuyers can’t earn more than 120 percent of the area median income in the county where they want to buy.
Kevin Reen
“Homeownership is central to building wealth but has been out of reach for many minority families as a result of systemic inequalities in housing and finance,” said Kevin Reen, head of Wells Fargo Home Lending, in a statement. “One of the biggest barriers to achieving homeownership is coming up with the down payment. We’re proud to make this dream a reality for families through our new $10,000 Homebuyer Access grant.”
Some homebuyers may also qualify for up to $5,000 in closing credits through Wells Fargo’s “Dream. Plan. Home.” program, for a total of $15,000 in assistance.
Wells Fargo’s Homebuyer Access grants will initially be available in the following metropolitan statistical areas (MSAs):
- Minneapolis: St. Paul–Bloomington, Minnesota-Wisconsin
- Philadelphia: Camden–Wilmington, Pennsylvania-New Jersey-Maryland-Delaware
- Dallas: Ft. Worth–Arlington, Texas
- Washington, D.C.: Arlington–Alexandria, Virginia-Maryland-West Virginia
- Baltimore: Columbia–Towson, Maryland
- Atlanta: Sandy Springs–Alpharetta, Georgia
- Charlotte: Concord–Gastonia, North Carolina-South Carolina
- New York: Newark–Jersey City, New York-New Jersey-Pennsylvania
Last year Wells Fargo was among the first lenders to launch a special purpose credit program (SPCP).
Endorsed by federal regulators last year, SPCPs allow lenders to create programs to benefit economically disadvantaged groups without violating the Equal Credit Opportunity Act.
Lenders offering SPCP loans are permitted to consider characteristics such as race, national origin or sex if that benefits a class of people who would otherwise be denied credit or offered less favorable terms, the Consumer Financial Protection Bureau said in a 2021 advisory opinion.
Mortgage giants Fannie Mae and Freddie Mac have launched SPCPs in select U.S. cities that are aimed at boosting lending by expanding borrower eligibility criteria, reducing closing costs and providing flexibility in the form of down payment assistance. Lenders can participate in Fannie and Freddie SPCPs or develop their own programs.
Wells Fargo’s SPCP, announced in April 2022, initially focused on helping Black homeowners whose mortgages are serviced by Wells Fargo lower their interest rates and reduce their monthly mortgage payments. Wells Fargo subsidized the rate and covered one-time expenses like closing costs, helping more than 3,200 customers refinance.
Other lenders that offer mortgages through SPCPs include:
- AnnieMac Home Mortgage
- Bank of America
- Chase
- CrossCountry Mortgage
- Guaranteed Rate
- Movement Mortgage
- Rocket Mortgage
- TD Bank
- U.S. Bank
- United Wholesale Mortgage
- Wells Fargo
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