Aiming to boost homeownership for low-income families, Fifth Third Bank is rolling out a new mortgage lending program that will provide as much as $1,500 that certain borrowers can use to cover their closing costs.
Fifth Third announced Monday that it is launching the “Fifth Third Community Mortgage,” which provides closing cost assistance to low-income borrowers or borrowers buying a home in a low-income community.
According to the bank, the Fifth Third Community Mortgage will provide as much as $1,500 to cover the lender’s closings and some fees.
The bank said the new loan can be combined with its down payment assistance program, which provides up to $3,600 to qualifying low-income buyers or those buying in low-income areas.
Additionally, the Fifth Third Community Mortgage requires a down payment of “about 3%,” the bank said. The loan also features discounted costs for financial services, and doesn’t require the buyer to pay for private mortgage insurance.
But the programs aren’t available to everyone.
To be eligible for the Fifth Third Community Mortgage, the property must be a one-unit, primary residence in one of the following states: Florida, Georgia, Illinois, Indiana, North Carolina, Ohio, Tennessee, or West Virginia.
Additionally, the property itself must either be located in a low-income U.S. Census tract or the borrower’s gross annual qualifying income must be at, or below, 80% of the area median income.
Beyond that, the maximum loan amount on the community mortgage is $250,000, at least one qualifying borrower must complete a homebuyer education course, and the borrower must contribute at least $500 of their own money.
To be eligible for the bank’s down payment assistance program, the property must be in one of the following states: Florida, George, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, or West Virginia.
Additionally, the property must be located either in a low-income U.S. Census tract or borrower must meet the low-income limit threshold based on the qualifying income listed on the Federal Financial Institutions Examination Council’s website.
“We want to help build strong communities,” said Chris Shroat, head of Fifth Third Mortgage.
“We know that making homes affordable is one of the best ways we can help improve our neighborhoods. Home ownership is one of the strongest indicators of a neighborhood’s strength and success,” Shroat added. “Fifth Third created a responsible mortgage, getting customers into an affordable property with less money out of their pockets and a sustainable down payment.”