ValueInsured and Amalgamated Bank announced on Wednesday that they are teaming up to provide homebuyers with +Plus, a first-of-its-kind financial product that protects homebuyers’ down payments from decreasing market values, according to a release sent out by the companies.
Although the new program was announced in October of 2015, +Plus is now available for the first time from a major lender through Amalgamated Bank.
The program is available for free through the bank’s First-Time Homebuyer +Plus program, and covers up to 5% of the home’s purchase amount.
There is monthly fee, in some cases, for the service.
The full program and its exceptions are explained here, however ValueInsured gives a basic overview of the program:
“+Plus works like the insurance homebuyers are already paying for at closing, such as private mortgage insurance, which protects the bank. But, with +Plus, the policy protects the homebuyer: If the market falls and the homeowner decides to sell, +Plus will reimburse them up to the full value of their down payment. The average cost for the protection is equivalent to less than a lunch per month.”
Amalgamated Bank believes this new programs will help potential buyers achieve their homeownership goals.
"The idea behind embedding down-payment protection in First-Time Homebuyer +Plus is simply to empower our customers to achieve the American Dream of homeownership," said Keith Mestrich, Amalgamated Bank president and CEO.
"Working people shouldn't have to worry about losing the financial control and flexibility that comes with renting when they make the decision to buy,” Mestrich said. "If they need to sell their home, they may be able to do that even if their local housing values are lower than when they purchased.”
Previously, homeowners had no access to the insurance programs that lenders had to protect against market value changes.
"At last, the homebuyer is protected," ValueInsured CEO Joe Melendez said. "It's fitting that Amalgamated Bank, which has long stood for innovation and customer empowerment, is the first bank to offer this important new protection directly to homebuyers. It helps keep home buying fair, safe and transparent."