Rocket Mortgage rolls out lender-paid buydown product

Rocket Mortgage is offering a lender-funded 2/1 temporary buydown home loan geared toward first-time homebuyers. 

The lower rates in a loan's first and second years will be fully funded by a special escrow account by the lender, the company announced Monday. The product, known as Welcome Home RateBreak, is available for home buyers making 80% or less than their area median income. The new buydown is also only available for single-unit primary residences, and consumers still need a 3% down payment.

The product is not restricted to first-time home buyers, but Rocket emphasized that it is a tool to help that group mitigate today's high-cost market. The lender cited National Association of Realtors data finding first-time home buyers accounting for only 29% of home sales in June. 

"Rocket is committed to creating and delivering unique programs that address the challenges homebuyers face today," said Bill Banfield, chief business officer at Rocket Cos., in a press release. 

The lender didn't say how much it set aside for the escrow accounts that will fund the buydowns. A representative for Rocket Mortgage didn't immediately respond to a request for comment. 

Welcome Home RateBreak is one of several efforts Rocket has promoted for originators as the industry faces rates which, despite beginning to decline, remain well over 6% for a 30-year fixed rate loan. The Detroit-based lender still offers its "One+" program in which it covers 2% of a consumer's 3% down payment.

The company's wholesale business, Rocket Pro TPO, also recently ran a limited promotion in which it waived a $795 origination fee for home equity loan submissions. Rocket reported record-high home equity volume in the second quarter, it said earlier this month. That result was part of a larger earnings in which the mortgage giant recorded quarterly and annual gains in closed origination volume.