What is the biggest barrier to homeownership?
“That’s a significant amount, and what we’re trying to do is eliminate the down payment barrier and also set up families for long-term, successful homeownership,” Freudenberger told MPA, noting that amassing enough for a down payment is the most significant barrier for would-be homeowners. “So many borrowers eligible for these programs don’t know they exist. We’re really trying to get the word out because we think it can really change the minority homeownership gap.”
The bank this week expanded its Welcome Home grant program into five other markets after a successful launch in Chicago one year ago. The program now reaches into Minneapolis, Milwaukee, St. Louis, Indianapolis, and Lake County, IL – Kenosha County, WI.
Expansion into those markets was largely predicated on the success of the pilot in Chicago, Freudenberger agreed. In the initial launch market, the bank funded some $500,000 in down payment assistance, “and that’s through the Welcome Homes grant program,” he added. “We were able to leverage another $500,000 in other forms of down payment assistance.”
The current volatility of the market heightens the need for such programs, Freudenberger suggested. With interest rates on 30-year mortgages still well above 6%, this program can help keep homeownership a reality for many, he noted.
For eligible borrowers, he said, the results can be transformative. With the help of such programs, homebuyers can contribute as little as $1,000 from their own funds in locking into a 30-year fixed mortgage.
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