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Credit-union-backed loan-loss reserve bill aims to enable zero-down mortgages for creditworthy renters
Summary
House Bill 3,188 would create a state loan-loss reserve to allow credit unions (and potentially other regulated lenders) to offer zero-down, no-mortgage-insurance mortgages to qualified first-time buyers; proponents said the program is modeled on successful pilots and would recycle funds as loans are repaid.
House Bill 3,188 would establish a Welcome Home Assistance Program Fund — a state loan-loss reserve intended to let regulated lenders offer zero-down, no-mortgage-insurance mortgages to qualifying first-time buyers with sufficient credit profiles but insufficient savings for a down payment.
Devin Mullins, testifying on behalf of Representative David Bowman, said the bill targets "reliable renters with at least a 680 FICO score who can afford monthly rent payments but cannot afford the upfront cost of a home." Mullins said the fund would allow credit unions to extend 0% down mortgages for buyers at or below 130% of area median income, backed in part by a state reserve that reimburses a capped share of lender losses in…
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