AEA Federal Credit said that over the next two years it will commit $20 million to increasing homeownership in Arizona's border-region with Mexico. The project is being undertaken as part of the Arizona Border Initiative with Fannie Mae; AEA FCU is the first Cu to partner with the secondary market giant in the program.
The Arizona Border Initiative includes flexible lending options for minority families, immigrant families, borrowers with limited savings for a down payment, and borrowers with past credit challenges.
Three new mortgage financing pilots designed specifically to meet the unique needs of United States/Mexico border-region borrowers have also been introduced. The three programs are:
* Border Region pilot offers expanded credit flexibilities that address unique credit issues of low-income border populations who experience high rates of unpaid medical collections and lack credit histories. No longer will unpaid medical collections that do not exceed $5,000 be disallowed when determining credit worthiness for a conventional mortgage loan. In addition, Verification of Rent forms from landlords will be accepted to demonstrate consistent payment practices, instead of 12 months of canceled checks that are normally required to substantiate a borrower's rental payment history. These flexibilities are available with all the Border Region pilots.
* Border Region Sweat Equity pilot allows borrowers to contribute labor, or sweat equity, in lieu of a cash contribution, to pay for as much as 25% of the purchase of the as-completed value of the home.
* Border Region Renovation pilot was created to renovate and transform substandard housing, by creating one loan for the mortgage and the costs of substantial renovation of the property. The renovation costs can represent up to 75% of the as-completed value of the property.
