Borrowers who want a loan backed by the Federal Housing Administration or the Department of Veterans Affairs may qualify to receive as much as $3,500 in closing cost assistance from BBVA Compass, thanks to a new program announced this week by the bank.
BBVA announced Monday that as part of an effort to increase homeownership for low-to-moderate income borrowers, the bank is now offering thousands of dollars in closing cost assistance on FHA and VA loans.
Under the program, qualifying borrowers can receive as much as $3,500 that can be used toward their closing costs for FHA loans and as much as $2,500 for VA loans.
According to the bank, the closing cost assistance will consist of a combination of waived fees, lender credit, and pricing credits that can be used to offset various closing costs, like appraisal or title insurance fees. The assistance may also be used to cover prepaid items like homeowners insurance.
The borrower may also use the pricing credit to buy down and lower their interest rate.
But as typically the case with these types of programs, not all borrowers are eligible.
According to BBVA, to be eligible to receive the assistance, the subject property must either be located in a low- or moderate-income census tract, or the income of all applicants on the loan must be less than 80% of the Federal Financial Institutions Examination Council Median Family Income, which is between $38,900 and $134,800 in the areas where the bank operates.
The credit amount varies by loan size, and the maximum credit amount is $3,500 for FHA loans and $2,500 for VA loans.
“Homeownership can seem far out of reach, particularly for LMI borrowers, when you look at all the costs associated with simply borrowing money. That’s not the case. There are an abundance of programs available, especially at BBVA Compass, for borrowers who qualify,” BBVA Mortgage Banking Segment Executive Joe Cartellone said.
“It’s our goal as a bank to make sure that those who want to move into this aspect of their financial lives can and can do it in a way that puts them on the best financial footing,” Cartellone added.
“BBVA Compass committed long ago to invest and create opportunities in the communities in which it operates," Cartellone concluded. “This is just one more example of the bank going the extra mile to help build up those same communities, and put residents on firm financial footing.”