Movement Mortgage is the latest of many mortgage lenders to offer a zero down option for prospective home buyers, referred to as the Mortgage Assistance Program, or MAP.
Like others before it, the MAP will rely on a 3% grant that doesn’t need to be paid back by the borrower.
It combines that 3% grant with a 97% LTV mortgage backed by Fannie Mae or Freddie Mac, presumably. I just know it’s conventional financing, not FHA or some other government stuff.
This is similar to the Quicken Loans 1% down option, though instead of a 2% grant, you get 3%. Seeing that you don’t need to pay it back, you might as well get the full 3%, eh?
Three other big banks offering zero down financing include BBVA Compass with their HOME loan program, BancorpSouth with their Right@Home loan program, and Fifth Third with their Down Payment Assistance Program.
What’s becoming increasingly clear is that lenders are accommodating those with little or nothing set aside for down payment, a top concern for would-be buyers.
It’s a little frightening given home prices have ascended back to old heights, and in some cases, new heights. But at least underwriting is, well, actually being conducted these days.
MAP Available to First-Time Buyers
As you might expect, there are some rules associated with Movement Mortgage’s MAP, perhaps the most important that you be a first-time home buyer. That tends to mean no ownership in the past three years. Sorry investors.
Additionally, Movement notes that you need to meet certain income and asset criteria, which are apparently based on need and median limits in the area you wish to purchase.
Other than that, it appears to be pretty straightforward and probably based on Fannie and Freddie’s flexible 97% LTV underwriting guidelines, which may allow credit scores as low as 620.
As far as property type, you’re likely looking at single-unit principal residences only, including condos.
And as noted, you don’t need a down payment thanks to that 3% grant. Movement Mortgage says it doesn’t need to be repaid, nor does it result in a second lien or promissory note.
But I assume there is some requirement to stay in the property (or at least the mortgage) for some reasonable period of time to prevent flipping.
It’s looks like you’ll also be on the hook for mortgage insurance, because as I’ve said before, if you don’t put down 20%, you’re paying PMI.
In terms of mortgage rates, you might get stuck with a higher-than-market rate because of the flexible financing terms, though it could still be quite competitive. The only way to know for sure is to comparison shop.
There’s also mention of benefitting from homeownership education, so it sounds like you might need to take a course to qualify for the zero down financing as well. Of course, there’s no harm in educating yourself on homeownership.
The program also comes with voluntary job-loss insurance coverage, assuming you aren’t self-employed.
This benefit covers as many as six monthly mortgage payments due to involuntary unemployment. The maximum benefit is $1,500 per month, or $9,000 total over the coverage period.
Movement Mortgage is licensed in 47 states, meaning there’s a good chance you’ll be able to work with them.
Aside from this new program, they also offer VA, FHA, USDA, home equity, and renovation loans.
Founded in 2008, right after/during the housing crisis, they mustered $7.83 billion in home loan volume in 2015, which is roughly one in every 75 home purchases in the United States.
Their goal is to underwrite and process 70% of their loans in just seven business days with the help of their digital EasyApp experience.
Movement Mortgage MAP Guidelines
- 100% financing
- 3% grant provides you with instant equity
- doesn’t need to be paid back
- conventional financing (likely backed by Fannie or Freddie)
- must be a first-time buyer
- must be owner-occupied residence
- home buyer education may be required
- optional job-loss mortgage protection coverage available