NATIONWIDE – Rocket Mortgage, the nation’s largest retail home lender, announced Monday, the ONE+ 1% down home loan program that includes a 2% grant. The company says the program will dramatically increase access to homeownership for millions of low-to-moderate-income earning Americans.
According to MarketWatch, the 30-year fixed-rate mortgage rose to over 7% this week from 6.95%. Higher mortgage rates translate into a higher cost of homeownership – monthly mortgage payments have increased an average of $121 since last year.
The Rocket Mortgage ONE+ program allows a homebuyer to make a down payment of 1% of the purchase price. Rocket Mortgage will cover the remaining 2% needed to reach the required threshold for conventional loans. The homebuyer will go into the loan with 3% equity.
In addition to reducing upfront costs, ONE+ eliminates the monthly mortgage insurance fee for the homebuyer. This is traditionally required if the buyer places less than 20% down on their purchase.
Rocket Mortgage provides a home purchase example using a $250,000 loan at 6%:
- The homebuyer provides $2,500 for a down payment (.01 × $250,000 = $2,500).
- Rocket Mortgage covers 2% of the loan amount (.02 × $250,000 = $5,000).
- The monthly principal and interest payment is $1,453.91.
- The homebuyer could save up to $245 per month by not having to pay for mortgage insurance.
To qualify for the mortgage the homebuyer can’t make more than 80% of the median income in the area they are looking to buy. Homebuyers can find the Area Median Income by clicking here.
A credit score of 620 or better is also required. Only one unit primary residences are eligible. Manufactured homes are eligible.
“We talk with people from all walks of life every single day – many of whom are ready to own a home, and could easily make the monthly mortgage payments, but are having trouble saving for a down payment,” said Rocket Mortgage CEO Bob Walters.
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Walters says ONE+ is a response to that feedback and the latest example of their commitment to creating programs that help make homeownership more attainable.
The company estimates that more than 90 million people can meet the income requirements for the ONE+ program.
Homebuyers can get more information about for ONE+ at RocketOnePlus.com and on the Rocket Mortgage mobile app on the Apple store or Google Play store.