Rocket Mortgage, Freddie Mac offer down payment aid through SPCP

A major lender has teamed up with a government-related mortgage investor to offer first-time homebuyers with qualifying incomes in certain areas a break on the money they need to bring to the table to buy a house.

Rocket Mortgage is offering $3,000 in down payment funds through Freddie Mac's  BorrowSmart Access special-purpose credit program, which is part of government-sponsored enterprise efforts to narrow the racial homeownership gap. Freddie Mac is open to inquiries about the program from other lenders.

"As our first SPCP, we intend to use this offering to serve traditionally underserved communities, while also learning valuable lessons that will inform potential future SPCP offerings," Danny Gardner, a senior vice president of client and community engagement at Freddie Mac, said in a blog post.

The program shows promise when it comes to closing the homeownership gap in that it addresses "a concern we've heard time and again — the difficulty of savings for out-of-pocket expenses when buying a home," Rocket Mortgage CEO Bob Walters said in a press release.

Borrowers' incomes must be no higher than 140% of the area median, according to Rocket. Areas that will initially be served by Freddie's program include counties in 10 metropolitan areas, including Atlanta, Chicago, Detroit, Houston, Miami, Philadelphia, and St. Louis. Home purchases in some counties within Memphis, Tennessee, El Paso and McAllen in Texas also are eligible.

The move follows not long after an earlier SPCP Rocket said it partnered with Fannie Mae on, through which designated entry-level buyers can receive up to $7,500 they can use to cover closing costs.

The earlier program, Purchase Plus, will initially serve certain census tracts in six cities: Atlanta, Baltimore, Chicago, Detroit, Philadelphia and Memphis, Tennessee. Also, Purchase Plus eliminates income exclusions, according to Rocket. It has two components. One is a "base" $5,000 credit. The other is a lender credit based on 1% of the home's purchase price up to $2,500.

Purchase Plus and BorrowSmart may serve some overlapping areas but can't be combined given that they're offered by two different mortgage investors. However, it might be possible to otherwise combine the assistance from each with additional borrower incentives available from the particular GSE involved or other sources.

Related Rocket offerings include a "wealth accelerator" program offered by the company's community fund affiliate, which aims to give residents in Atlanta, Cleveland, Detroit and Milwaukee coaching to help them improve their finances.