CAMBRIDGE, Mass. - Cambridgeport Bank, Fannie Mae, and the North Carolina community group Self-Help have launched a pilot program to offer 1%-down-payment mortgages that do not require mortgage insurance.
The 30-year fixed-rate loans will be available to first-time homebuyers and those who have not owned a home in the last three years.
James B. Keegan, president and chief executive officer of Cambridgeport Bank, said his bank conceived the program and proposed it to Fannie Mae, which in turn brought in Self-Help.
Loans will be originated by Cambridgeport Bank then sold to Self-Help and in turn to Fannie Mae, which will package them as mortgage-backed securities to be purchased by investors. Cambridgeport Bank will continue to service the loans.
"We are pleased to continue our long tradition of helping individuals and families become homeowners," said Mr. Keegan in a statement. "This new program should help reduce the down payment obstacle that many families may face in their desire to own a home."