HomeFit™ Mortgage

Community Development Corporation of Utah (CDCU) offers the HomeFit™ Mortgage, a loan for qualified homebuyers that is an affordable alternative to other mortgage loans. The HomeFit™ Mortgage finances 100% of the purchase price of the home through two loans – the first 80% is covered through a conventional loan, and the remaining 20% is a second mortgage that is serviced and managed by CDCU’s affiliate, Community Development Fund of Utah.

 

Because of the two loans, there is NO requirement for mortgage insurance. The interest rate on the second mortgage is 2% higher than the interest rate on the first. Even with the higher interest rate, the combined monthly mortgage payments are less than what they would be on a FHA loan.

 

There is a 2% minimum contribution required, which is applied towards closing costs. This requirement creates serious buyers who are less likely to default on their mortgage. If you need help saving, CDCU also offers a matched savings program (HomeFit Saver) available to help you work towards saving your 2% contribution. Our homeownership advisors will help you create a personalized savings plan to assist in preparing for your home purchase and reaching your financial goals.

 

In addition, CDCU’s outstanding home buyer education fully prepares clients for the home purchase process.

Requirements for the HomeFit™ mortgage:

  • Minimum credit score of 620 (including at least one year of credit history)
  • Maximum DTI (total debt, including mortgage payments to total income) of 43%
  • Two years of employment history
  • 2% minimum contribution towards closing costs. 1% of the contribution must be the borrower’s own funds. The other 1% can be gifted.
  • Reserved savings (even after your 2% contribution, we like to see that you still have some savings in case of emergencies)
  • Completed HUD-approved home buyer education class

Thinking about refinancing?

The HomeFit™ Mortgage is also available for people interested in refinancing their mortgage without having to pay for mortgage insurance. The requirements are similar to qualifying for a home purchase mortgage. You will need to have a minimum credit score of 620, stable employment history, no major derogatory credit items (such as bankruptcy), some money in reserves, and some equity in your present home.

Contact an advisor to review your current situation and see if refinancing will provide a significant financial benefit to you.

Pay for your Appraisal Here

Appraisals for purchases or refinances may cost $500.00 or $520.00, depending on services provided. Please consult your loan coordinator and add the address of the property being purchased or refinanced in the comments section.

FAQ’s

Why is there a 2% premium on the second mortgage?

Providing 100% financing can be risky. This is our equivalent to mortgage insurance. Even with the higher interest rate, the combined monthly mortgage payments are less than what they would be on an FHA loan. If you are able to put 20% down, you will not have a second mortgage. Speak with one of our advisors and they will help you create a plan to save your 20%.

Is there a prepayment penalty on the HomeFit™ Mortgage?

There is no pre-payment penalty. We encourage you to pay extra towards your second mortgage in order to pay it off quickly. You will end up paying less money in interest by doing this. As a matter of fact, if you can pay off the second mortgage early, your monthly payments will go down while you are also building equity in your home.

Do I need to make two separate payments?

Yes. Fortunately, both payments are sent to the same place. This makes payment easy. You can also set up automatic payments from your bank account instead of mailing the payments.

What do I need to do to apply for the HomeFit™ mortgage?

Your first step is to meet with one of CDCU’s homeownership advisors to review your situation and determine if the HomeFit™ mortgage is a good option for you. We will also discuss other mortgage options and programs that may be available based on your situation. Our goal is to help you determine your readiness for home purchase, determine action steps needed to prepare for homeownership (if needed), and provide information on additional resources, options, and programs.

Home Fit Mortgage
Ready to get started?