In a move designed to bolster home sales and lending businesses, GE Mortgage Insurance announced today that it will partner with a mutual fund company to offer loans with low down payments to home buyers.
The program will be offered through American Family Funds' Dove Foundation Down Payment Gift Program, a nonprofit charity fostered by the firm. The partnership with that charity will allow home buyers to get a gift from AFF of up to 3% of a home's cost, essentially making it possible for buyers to finance 97% of a home's purchase price. GE Mortgage, meanwhile, will provide mortgage insurance on the loans.
The idea is simple: Make it easier for people to buy homes, thus improving the bottom lines of realtors, lenders and mortgage companies. "We're creating a larger pool of qualified buyers by providing down payment assistance," said Joel Pate, president of American Family Funds.
The companies will offer the service initially in southeastern states. To participate, buyers must qualify for a loan that accepts charitable contributions and buy a home from a builder or seller who is willing to take part in the program.