AZUSA (CBSLA.com) — Word is spreading quickly about a new kind of home loan that helps low-income buyers build up equity and achieve the American Dream.
No down payment is required, but there are strict conditions.
CBS2's Jasmine Viel spoke with Grace and Armando Ong, the first couple to buy a home with this loan in Azusa.
"Oh, we are so overwhelmed and excited," Grace Ong said.
It was a far cry from their West Covina apartment and the dark days of losing their home in a short sale.
As low-income borrowers, they were approved for a 15-year loan with an initial rate of 2.5 percent. But they bought the rate down to 0.5 percent.
It's an amazing deal made possible with help from the non-profit housing agency the Neighborhood Assistance Corporation of America (NACA).
"It is an incredible game changer for the mortgage industry as a whole," according to Tim Trumble of NACA.
Mortgage consultant Ana Datta worked with the Ong family and Citibank to get them approved for their $400,000 home. In her 20-year career, she says she's never seen anything like this.
"They will build up so much equity in the house that, if they want to move a few years down the line, they should be able to move to a beautiful, big home," Datta said.
With no down-payment, no credit score check, and no closing costs, it sounds almost too good to be true.
"First off, the down-payment money when used to buy down the interest rate is much more effective in making the payment much more affordable for that homeowner. When the payment is more affordable, there's obviously a much lower chance of default," Trumble said.
The Ong's will be paying close to $3,000 a month in mortgage and it took them several months to go through all the paperwork. But they say it's a great deal.
"We're happy, very happy," Grace Ong said.
NACA expects to help hundreds of thousands of homeowners over the next few years.
For more about the NACA home purchase program, click here.
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