Luther Burbank Savings, in Santa Rosa, Calif., has established three home loan programs aimed at helping low- and moderate-income borrowers afford to buy homes in nine California counties.
The $4 billion-asset bank agreed in 2012 to invest $2 million in low-income communities as part of a consent order with the Justice Department for alleged discrimination.
The loan programs have flowery names associated with the bank's namesake, the American botanist Luther Burbank, who settled in Santa Rosa, Calif., at the turn of the century and developed the Shasta daisy, among other plants.
The "Grow" program is a conventional fixed-rate, 30-year mortgage with a down payment of as little as 3% and no mortgage insurance. It includes both purchase and refinance loans for owner-occupied properties ranging from $20,000 to $417,000 for single-family homes and condominiums, and up to $533,850 for two-unit properties.
The "G2", short for "Grow2," loan is a 2% fixed-rate, 15-year loan with assistance to borrowers in financing the 3% down payment. The bank is offering a second-trust-deed option that provides borrowers with 2% of their purchase price to be used as part of the down payment. An extra 1% of the loan can assist in covering some closing costs.
The "Bloom" program offers 4% fixed-rate, 15-year home-improvement loans from $10,000 to $30,000 without the complexity of the borrowers having to verify proposed home-improvement plans.
The "Grow" and "Bloom" loans are available in nine California counties: Alameda, Contra Costa, Los Angeles, Marin, Orange, San Francisco, San Mateo, Santa Clara and Sonoma.
Borrowers financing properties in low- or moderate-income census traces are not subject to income restrictions. Applicants outside such census tracts must have total income limited to a maximum of 160% of the area median.
Borrowers also must complete prepurchase homebuyer education and counseling.