U.S. Bank Access Home Loan Offers Up to $12,500 in Down Payment Assistance and a $5K Lender Credit

The mortgage deals keep coming, the latest being the new “U.S. Bank Access Home Loan,” which comes with up to $12,500 in down payment assistance and a lender credit up to $5,000.

This particular loan is geared toward home buyers in markets where the minority population is more than 50%.

However, borrowers do not need to be a first-time home buyers to qualify, though income limits do apply.

At the moment, it’s being piloted in select cities nationwide, including Las Vegas, Los Angeles, Little Rock, Milwaukee, and St. Louis.

Read on to learn more about this program, which allows FICO scores as low as 640.

How the U.S. Bank Access Home Loan Works

Between steep home prices and high mortgage rates, home buying has gotten expensive and out of reach for many.

To help alleviate that, Minneapolis, MN-based U.S. Bank has committed $100 million to the new Access Home Loan program over the next five years.

As stated, the goal of the loan is to increase access to homeownership for minority families.

It also aligns with the company’s initiative focused on advancing Black homeownership.

Specifically, this means residing in a market where the minority population is more than 50%, per census tract data.

Additionally, the borrower’s income must be equal to or below the HUD Area Median Income in the area where they wish to purchase a property.

However, it’s still possible to qualify for this loan if your earnings are above the median income, assuming the subject property is located in a low-to-moderate income census tract.

Beyond that, you don’t need to be a first-time home buyer to qualify, and the credits can be combined with other down payment assistance grants and programs.

Speaking of, you can get up to a whopping $12,500 in down payment assistance via the U.S. Bank Access Home Loan, along with up to $5k in lender credits.

You can receive down payment assistance of up to either $8,000 or 3% of the purchase price up to $12,500 – whichever is greater.

That puts the maximum purchase price at around $417,000 to get the full 3%.

Those lender credits can be used to offset your closing costs and/or buy down your interest rate.

And the minimum down payment is just 3%. This means you can purchase a home with very little down, and potentially snag a discounted mortgage rate in the process.

Note that there is a $1,000 minimum contribution from the borrower’s own funds, so you can’t show up completely empty-handed.

Perhaps most importantly, the assistance funds are deferred, but must be repaid.

They are due upon sale of the property, or if the first mortgage is refinanced or paid off.

So it appears you get an interest-free loan, as opposed to an actual grant that needn’t be repaid.

U.S. Bank Access Home Loan Fast Facts

• Receive up to $12,500 in down payment assistance funds
• And up to $5,000 via a lender credit (for closing costs, etc.)
• Must buy in a majority-minority location where total population is greater than 50% minority
• Income must be at/below median unless you purchase in a low-to-moderate income census tract
• Minimum FICO score of 640 (680 if more than one-unit property)
• Down payment as low as 3% (must contribute at least $1,000)
• Max debt-to-income ratio (DTI) of 43%
• Borrowers must complete a home buyer course
• Mortgage insurance is covered by U.S. Bank
• Can combine with other down payment assistance grants and programs

Where the U.S. Bank Access Home Loan Is Available

At the moment, the U.S. Bank Access Home Loan is being piloted in select markets throughout the country.

Those include Las Vegas, Little Rock, Milwaukee, Minneapolis, St. Louis, along with six California cities.

The California cities are Fresno, Los Angeles, Oakland, Riverside/San Bernardino, Sacramento, and San Diego.

Within these pilot markets, the minority population must be more than 50%, as determined by census tract data.

Assuming all goes well, U.S. Bank will likely roll out the program to additional markets that fit the criteria.

Is This a Good Deal?

Whenever programs like this surface, I include a section about whether they’re a good deal or not.

Ultimately, you have to look at the complete picture to determine if the U.S. Bank Access Home Loan beats other options.

That means, once you find out you’re even eligible, comparing the mortgage rate, closing costs, payment, APR, and service to other banks, mortgage lenders, and credit unions.

Also note that the down payment assistance offered via this program has to be paid back if and when you sell or pay off the loan.

This might differ from other grants and down payment assistance programs where it’s forgiven after a certain amount of time.

Of course, U.S. Bank is also throwing in up to $5,000 in lender credits, which don’t need to be paid back.

And they’re covering mortgage insurance costs, which can be pretty pricey when you put little down on a home purchase.

It appears they only offer a 30-year fixed loan option, which is somewhat restrictive, but probably would be the chosen option for the majority of borrowers anyway.

All in all, this seems like a pretty good deal if you’re already in the market to buy a home, and it’s located in one of the eligible areas.