Senator Jack Reed (D-RI) joined Freddie Mac, Wells Fargo Home Mortgage, Sovereign Bank and Consumer Credit Counseling Services of Southern New England (CCCS) to launch a new $25 million statewide effort designed to help more families become homeowners.
Called Home to Rhode Island, the new initiative is designed to help hard working families, including low- and moderate-income and minority families, overcome a wide range of obstacles to buy or rehabilitate homes of their own. These obstacles include credit issues, un-established credit, or insufficient funds for large downpayments. Home to Rhode Island is expected to enable hundreds of families become homeowners and help narrow the gap separating Rhode Island’s 60 percent homeownership rate from the national homeownership rate of 68 percent.
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“Home to Rhode Island’s goal is simple: To get more Rhode Island families into the home of their dreams,” said Senator Reed, Chair of the Senate Subcommittee on housing. “For too many Rhode Islanders, understanding the home buying process and overcoming past credit issues puts that dream out of reach. Home to Rhode Island addresses both of these barriers to homeownership and I want to thank Freddie Mac, Wells Fargo, Sovereign Bank and Consumer Credit Counseling Services of Southern New England for their commitment to Rhode Island now and into the future.”
“Homeownership gives families a stake in their communities and a financial stake in the future,” said Leland C. Brendsel, Chairman and CEO of Freddie Mac. “This initiative combines the power of counseling with innovative loan products. Freddie Mac is proud to join with Senator Reed and our lender and community partners to enable more Rhode Island families to own the home of their dreams.”
Home to Rhode Island is part of a three-year, $100 million homeownership and home preservation initiative in New England that will also include Connecticut, Massachusetts, and New Hampshire. Special initiatives are being crafted for each state that will combine in depth pre- and post-purchase counseling for prospective borrowers through the region’s 35 CCCS offices with low-cost mortgages from Wells Fargo Home Mortgage and Sovereign Bank. Freddie Mac expects to invest $25 million in mortgages made under the Home to Rhode Island initiative.
Home to Rhode Island is the latest Freddie Mac effort to expand affordable home ownership opportunities in the Ocean State. Since 1996, Freddie Mac has invested more than $3 billion in mortgages, making affordable homeownership possible for more than 24,000 Rhode Island families.
Affordable, Low Downpayment Mortgages Are Key
One of the keys to Home to Rhode Island is Freddie Mac’s $25 million commitment to purchase mortgages originated by Wells Fargo and Sovereign Bank. This commitment will enable qualified families to get flexible, low-cost conventional mortgages with downpayments of as little as three percent. In some cases, families will be able to put down as little as $1,000 from their own funds and cover the rest of the three percent down payment through grants, gifts, and unsecured loans. Flexibility is also provided with respect to borrower credit and other loan underwriting criteria to help more families prudently achieve homeownership. By purchasing the mortgages from Wells Fargo and Sovereign Bank, Freddie Mac ensures a continuous supply of mortgage funds for additional homebuyers.
“Knowing first time homebuyers, on average, need 2.2 years to save for a typical downpayment of $18,000, this is simply a wonderful alternative for Rhode Island area residents. Moreover, this initiative will help individuals with credit challenges or those who have less than perfect credit,” said Tom Gamache, vice president and regional manager for Wells Fargo Home Mortgage. “We’re very excited about this partnership and hope that together with our partners we can help more Rhode Islanders achieve the dream of homeownership.”
“Sovereign Bank is pleased to participate in the Home to Rhode Island initiative with Freddie Mac,” added Joe Blaston, Sovereign’s Director of Mortgage Banking. “Providing low cost mortgages to qualified families is an example of Sovereign’s commitment to the communities that it serves.” In particular, Sovereign Bank is offering a special mortgage opportunity as part of Home to Rhode Island that will enable more families to qualify for mortgages to purchase two-and three-unit properties.
