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A Real Zero
Citizens debuts no-down-payment mortgage product for New Haven area
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Business New Haven
9/3/2002
By: BNH
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Citizens Bank officials joined with local political leaders in Fair Haven August 27 to unveil a new $25 million lending initiative designed to boost home ownership in greater New Haven.
The “Citizens Circle of Success Loan Program” requires no down payment from borrowers, as well as no private mortgage insurance (PMI). Such terms, say Citizens officials, will help to build home equity faster and result in lower monthly payments for borrowers.
Home-ownership rates in the city of New Haven - today approximately 29 percent - are far lower than the statewide average of 68.7 percent.
According to the bank, the Citizens initiative is targeted at borrowers who can afford a monthly mortgage payment but who lack the down payment typically required by traditional mortgage loans. A typical down payment runs about five percent of the purchase price - e.g., $7,500 for a moderately priced $150,000 home.
The income cap for the program is 120 percent of the New Haven median income as defined by the U.S. Department of Housing & Urban Development. That figure is $65,300, which means qualified borrowers must have an annual income of less than $78,360.
The “Circle of Success” is a so-called 80/20 financing program modeled after products offered to the high-end marketplace or jumbo loan borrowers. By combining first and second mortgages, the program eliminates the need for mortgage insurance, reduces the borrower's monthly housing expense and accelerates the accumulation of equity.
“When cities and non-profits work with corporations to help folks become successful, then the circle is complete,” said Joseph J. MarcAurele, CEO of Citizens Bank of Connecticut. “These partnerships are good for individuals, good for communities and good for business.”
The Citizens program requires borrowers to participate in a homebuyer education-training program, offered free of charge to participants. More information about the program is available by contacting 800-824-0245.
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