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Help In Getting A Loan Of Their Own
GRAND RAPIDS — Fifth Third Bank is introducing a mortgage loan program today that's designed to create more home-buying opportunities for immigrants with U.S citizenship.
Fifth Third's Immigrant Homeownership Loan program is now available here and in six other key metro markets in the Midwest.
"We were hearing from a lot of people that there were customers who were not able to buy homes using the traditional types of home mortgage programs," said Larry Magnesen, senior vice president and marketing director.
"The largest immigrant segment in our market is the Hispanic segment, but we know the program will be effective for other immigrant segments like the Asian community and the Bosnian community, etc."
Fifth Third's research shows very high rental rates among the foreign born population, and a "real desire for homeownership," according to Magnesen.
The new program "recognizes the cultural realities" of the immigrant family, said Senior Vice President Stewart Greenlee.
"We understand that many immigrants are first-time homebuyers, have no formal relationship with U.S. financial institutions, have limited traditional credit histories and may have difficulty accumulating funds for down payment," Greenlee said.
The new program attempts to counter those kinds of obstacles by accepting alternative borrower identification sources and allowing broader income sources and nontraditional credit references.
Individuals can apply for a mortgage using their Mexican government issued Matriculate Consular card or their IRS-issued individual tax identification number (ITIN) and a
Borrowers who don't have credit cards don't have credit histories, which is typically a stumbling block when applying for a loan.
"If people have been paying rent and utilities in their name at the same address for a couple of years, we're going to allow them to use their rent and utility receipts," Magnesen said. "Anything that shows stability and ability to repay obligations in a timely fashion is going to be acceptable to document good credit performance."
He said to Fifth Third's knowledge, no other lender in the Grand Rapids market today offers this alternative type of loan program, though some banks may be on the verge of doing so.
Magnesen said he knows of a bank in Milwaukee, half a dozen banks in Chicago and a few in California that operate similar loan programs.
"The interesting thing is that the banks in Chicago that have been doing this for a couple of years and have been relying on these nontraditional methods of credit evaluation have had just outstanding credit performance on these loans," he observed.
"In many cases, immigrants who have been living here for a number of years are very eager for homeownership and very determined to stay in a residence once they own a home."
A 5 percent down payment is required and the flexible terms of the program allow borrowers to use cash-on-hand, cash "gifts" from family members and cash incentives offered by the home seller to raise that amount, Magnesen said.
The Immigrant Homeownership program is available through any Fifth Third mortgage loan originator, and a loan can be used for a single family home or duplex as long as the residence is owner occupied. Borrowers can chose between a 30-year fixed rate or adjustable rate mortgage.
Magnesen doesn't anticipate loan applicants will face any language barriers.
"We really have had an emphasis on bilingual staff in all our lines of business," he said. "At our Grandville Avenue banking center 100 percent of our staff is Spanish speaking."
Fifth Third has taken a kind of grass roots approach in getting out the word on the program, introducing it through cultural centers, social service centers and churches that serve growing immigrant populations.
"Word of mouth in this community is very powerful," Magnesen remarked.
The bank expects that to a large extent, homes purchased under the program will be relatively modestly priced, perhaps in the $50,000 to $100,000 range.