"The Wealth Building Home Loan is a 15-year mortgage with a fixed interest rate that can be bought down to zero. In addition, little or no down payment is required, there are no additional fees, and underwriters will pay far more attention to your residual income than to your credit score."
"To make the payments more affordable, the offering rate will be about three-quarters of a percentage point below the 30-year FHA rate. And the rate can be bought down even further. For every 1% of the loan amount the borrower puts up as a down payment, the interest rate will be lowered by half a percentage point, which is twice as much as usual."
"Typically, the monthly payment on a 15-year loan is higher than that on a 30-year loan. But the loan amortizes much more quickly, meaning you build wealth - or equity - faster."
Two major banks have launched pilot programs for the Wealth Building Home Loan, a 15-year fixed-rate mortgage designed for low- and moderate-income borrowers. The product features rates approximately three-quarters of a percentage point below standard 30-year FHA rates, with additional rate reductions available through down payments. Borrowers need little to no down payment, face no additional fees, and qualify based on residual income rather than credit scores. The loan amortizes quickly, enabling faster equity building compared to traditional 30-year mortgages. Creators Edward Pinto and Bruce Marks plan to expand the program to ten additional institutions. Industry leaders including Lewis Ranieri and Joseph Smith have endorsed the initiative, though widespread adoption may take considerable time.
Read at Los Angeles Times
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