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BBVA Compass Launches No Down Payment Mortgage


Sure, Fannie and Freddie now allow LTVs as high as 97%, and the FHA only requires 3.5% down, but why stop there?

Today, BBVA Compass announced the launch of its “Home Ownership Made Easier” (HOME) loan program, which allows borrowers to snag 100% financing on a home purchase.

The bank is offering the new product as part of its pledge to put $11 billion to work to help low- and moderate-income individuals realize the dream of homeownership.

In order to qualify, the applicant(s) on the loan cannot have an income that exceeds 80% of the HUD median income for the area in which they buy.

Assuming they fit within those limits, they can get a home with as little as $500 from their own funds.

For the record, the program is also available to borrowers with higher incomes if they finance properties in low- and moderate-income census tracts.

HOME Program Comes with a $4,500 Lender Credit

  • The BBVA zero down mortgage is known as Home Ownership Made Easier (HOME)
  • It’s part of their pledge to put $11 billion to work for low/moderate income borrowers
  • Aside from requiring just $500 from a borrower’s own funds
  • It comes with a $4,500 lender credit to cover closing costs

Aside from requiring nothing down to purchase a property, the HOME program also comes with a lender credit of up to $4,500 to cover closing costs such as the loan origination fee, underwriting and processing fees, and title reports, to name a few.

It can also be used to pay for the appraisal and credit report, though it cannot be used for discount points or escrow items such as insurance premiums and taxes.

However, the seller or another third party is permitted to pay for these items.

Just remember that a lender credit will lead to a higher mortgage rate…it’s not really free, just less out-of-pocket early on. In fact, it costs borrowers over the long run in interest.

BBVA Compass executive director of real estate lending Eduardo Castaneda noted in the press release that borrowers participating in the HOME program might enjoy monthly mortgage payments that are lower than their current rent payments.

And that would apparently prove their ability to make payments going forward, despite what some may call higher-risk lending.

Additionally, borrowers will have to complete a homebuyer education course if they wish to utilize the program, which has proven to lower default rates in at least some cases.

HOME Only Offers Fixed-Rate Programs, But No PMI!

  • While you can only get a fixed-rate home loan via this program
  • It comes in a variety of loan terms including 10- and 20-year options
  • BBVA is also waiving the PMI requirement
  • Though it might be reflected in the interest rate (higher to compensate)

The HOME Mortgage is only offered in fixed-rate varieties, with 30-, 25-, 20-, 15-, and 10-year fixed mortgages available.

This will ensure that borrowers won’t face any surprises if mortgage rates climb in the future, which they’re sure to do.

More importantly, borrowers don’t have to deal with pesky private mortgage insurance when they go with the HOME program.

That can save $150 or so a month depending on the situation, which should help to keep monthly payments down.

If you’re not familiar with BBVA Compass, it’s the U.S.-based subsidiary of Spanish bank BBVA, which also happens to be the largest financial institution in Mexico.

Compass has 672 branches mostly in Sunbelt-states, including Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas.

Tip: For a limited time (until March 31st, 2015), first-time home buyers can also receive a 0.25% lender credit if they complete 15 minutes of online counseling. It’s unclear if this can be stacked with the lender credit offered via HOME.

11 thoughts on “BBVA Compass Launches No Down Payment Mortgage”

  1. Okay – who’s pushing this HOME product? Gives a whole new meaning to “no skin in the game”. And then let’s make the lender liable when the owner of the “dream of homeownership” walks away from the property.
    Since when does this dysfunctional method of home ownership make any sense? Didn’t we learn ANYTHING from the last meltdown? Guess not….

  2. I think this is a great idea. And can help many people become home owners. It’s not always about having skin in the game but what’s most important is the ability to repay the loan. If they have verifable income, a history of paying rent that’s equal to or even more than what the new home payment would be, it is a fixed rate meaning the payment will not adjust to a higher unaffordable payment, then this is a good loan program. Down payment is not a factor. Im sure many people have defulted on homes they put money down is the ability to repay that is most important.

  3. I think this is a great home buyer assistance program for low income borrowers if they can actually find a home in their price range.

    The 2015 HUD AMI in Riverside County is $60,500, so this HOME program would only be available for borrowers who make 80% of that…..which is $48,400.

    In the Inland Empire where I specialize in providing down payment assistance and $0 down loans for moderate income borrowers, no one is buying a home if they only make $40,000.

    If BBVA Compass was serious about helping the first time homebuyer, they would increase their income cap to 120% or 140% of the AMI for anyone to have a chance of using this program.

    There are many programs here in Riverside County and Southern California where borrowers can make up to $80,000 to $125,000 and still receive a grant money to buy with $0 down payment.

  4. I’m a widow 59 year old would love my own home income only 762.00 monthly. Would like a rancher w/ 2br. 1 bath small yard not that many trees around do you think i can qualify for my own home. I’m a first time buyer credit score in the 600. Live in camden N.J. 08102. Plz let me know if i qualify.

  5. Glicery,

    In general, a credit score of 620+ will greatly expand your loan options, so you may want to determine how to get your scores up before applying.

  6. Renting a home that’s available for purchase . income $48K /yr. Home price $145K. Credit score 630-650. Need down payment assistance.Live in Florida.

  7. My wife and I are going thru a old deed in lieu that just got recorded in July of 2016.Should have been over yrs ago. We have a combined income of 93,000 a yr. We live in the Trussville, AL area. What options do we have to get approved for a mortgage and or assistance with a down payment?

  8. Darin,

    Only way to know for sure is to reach out to lenders/brokers and get qualified. It might be tough with the deed-in-lieu, but FHA is fairly accommodating if you have a compensating factor.

  9. I am a mortgage loan officer with BBVA Compass bank and would be happy to help anyone who has any questions about this great product! Please feel free to contact me at or call/text me at: 970-578-0005

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