To make homeownership more attainable for low-to-moderate income homebuyers in this challenging housing market, Guild Mortgage has launched a new 1% down, 1% one-year lender interest rate buydown home loan program.
With the 1% Down Payment Advantage program, Guild will cover 1% of the interest rate for the first year with a lender-paid temporary buydown, keeping the homebuyer’s monthly payments lower for the first 12 months.
“Guild is committed to providing innovative solutions that meet the current and future needs of homebuyers,” says Mary Ann McGarry, CEO for Guild, in a release. “No matter what is happening in the housing market, we want to get people into homes and help keep them there. With our new 1% Down Payment Advantage program, we are meeting our clients where they are and addressing head on the accessibility challenges so many Americans are facing in today’s housing market.”
Traditionally, a 3% down payment is the minimum required for conventional loans. The 1% Down Payment Advantage program allows homebuyers to purchase a home with a minimal down payment of only 1% of the purchase price, and Guild covers the remaining 2% to bring the down payment to the 3% requirement.
Borrowers also have the flexibility to refinance with Guild later, with the added benefit of no lender fees under the company’s Payment Protection program.
David Battany, executive vice president of capital markets for Guild, emphasized the importance of addressing the three key areas that impact homeownership: the cost to get into the home, the monthly cost to stay in the home, and the ability to handle unexpected emergencies in the first five years of owning a new home.
“We know that accessibility to homeownership goes beyond just lowering the down payment,” Battany says. “It’s about ensuring long-term sustainability by tackling the three critical financial challenges of buying and maintaining a home: upfront costs, monthly expenses, and financial resilience after purchasing a home.
“With our 1% Down Payment Avantage program we support homebuyers in all three of these areas,” Battany adds. “By putting an extra two points of cash into their reserves on day one and offering a 1% one-year interest rate buydown that reduces their monthly mortgage payment, we assist borrowers to more quickly build up their cash reserves which helps sustain them in their new home during their critical first five years of homeownership when most first-time homebuyers typically have low cash savings reserves. This sets the stage for a successful homeownership journey, arming them with the confidence and means to handle life’s unexpected surprises.”