A real estate agent hands a set of house keys to a smiling man and woman.

Citi expands program to make homeownership more accessible

Image credit: Getty Images

That’s good news for struggling buyers.

key point

  • Owning a home can promote financial stability, but it’s not an option for many low- and middle-income buyers.
  • A lender is expanding a program aimed at removing barriers to homeownership.
  • Citi’s HomeRun program is expanding to more cities.

Buying a home can be challenging for low- and moderate-income mortgage applicants for a number of reasons. First, those who don’t make a lot of money often struggle to come up with the funds to put down a down payment. Additionally, mortgage applicants with poor credit may struggle to get approved for home loans.

But one lender is looking to make homeownership easier for those who may have struggled to buy a property in the past. That’s a very positive thing, especially at a time when mortgage rates are getting higher and house prices are still rising across the country.

much-needed expansion

Citi has implemented a program called HomeRun to help disadvantaged buyers buy homes. Now, it is expanding the program, hoping to reach more people. Citi said the aim was to promote racial equality and financial inclusion.

Citi’s HomeRun program is designed to target low- and moderate-income earners based on census data. Currently, it applies to borrowers whose income is less than 80% of the median household income in their area. But that percentage is increasing to 120% to open up the program to more applicants.

The program is also expanding geographically. HomeRun is currently available in cities including Los Angeles, San Francisco, New York, Miami, Washington, D.C., and Chicago. But Citi plans to launch it in new markets, including Austin, Dallas, Atlanta, Denver, Houston, Philadelphia and Cambridge, Massachusetts. Moreover, Citi plans to specifically target a small number of borrowers in these markets.

Remove barriers to buying a home

A major benefit of the HomeRun plan is its low down payment requirement. Borrowers only need to make a 3% down payment to be approved.

Granted, FHA loans offer a fair amount of wiggle room when it comes to down payments, but they also charge upfront and ongoing mortgage insurance, which can be a burden on the borrower. HomeRun has no mortgage insurance requirements. And, it comes with a line of credit designed to offset or cover settlement costs.

Equally important, Citi wants to make the program accessible to borrowers with no credit history. For those without a credit score, Citi pledged to look into other methods of assessing borrowing risk, such as a history of timely rent and utility payments.

positive development

Recently, Bank of America announced plans to move forward with a $0 down payment mortgage program. This news from Citi helps make homeownership easier for borrowers who don’t make a lot of money or have a lot of resources.

Homeownership has long been thought to contribute to financial stability. Property owners don’t have to worry about being forced to move when their lease expires, or having to worry about rising rents. Additionally, property owners can choose to utilize the assets they have built in their homes as needed. So the fact that lenders are pushing to open their doors to underserved borrowers is a step in a very positive direction.

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