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Flickr/Mike Mozart
Bank of America’s introducing a new mortgage product with down payments as low as 3%—a move that undercuts the FHA, the government agency that punished the bank for errors on similar loans.
This new product will allow borrowers to avoid private mortgage insurance and make Bank of America’s loans cheaper than those offered through the FHA, which require down payments of at least 3.5%.
The loans will be backed by a partnership between Freddie Mac and the Self-Help Ventures Fund, a North Carolina nonprofit loan fund, the Wall Street Journal reports.
These new mortgages will entirely cut the FHA out of the process—something Bank of America is no doubt happy to do after paying $800M in 2014 for making errors on FHA-backed loans. [WSJ]
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