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Norwest launches new mortgage program

Norwest Bank has rolled out a new mortgage program to help low and moderate income people become homeowners. Known as CHAMP (Community Homeowners Affordable Mortgage Program), the statewide program is now available in northern Minnesota. The prog...

Norwest Bank has rolled out a new mortgage program to help low and moderate income people become homeowners.
Known as CHAMP (Community Homeowners Affordable Mortgage Program), the statewide program is now available in northern Minnesota.
The program provides funding for mortgages for income qualified applicants. The properties can be either single family or duplex, but must be in Minnesota for owner occupancy.
"This is a new program for us," said Norwest Regional President Fred Rolle, who announced the program March 15.
"The program is a first mortgage program designed to help them buy a home," he said. "The advantage is the small down payment with no mortgage insurance payment."
"Norwest works to build healthy communities, and we believe home ownership is a major part of that formula," he said. "CHAMP contributes to our communities by increasing home ownership rates and helps make the dream of owning a home a reality for many low and middle income households.
"In response to the need for home financing for working families, Norwest has responded with the introduction of CHAMP," said Rolle.
A CHAMP loan only requires 3 percent down. Applicants must be at or below 80 percent of the median county income. In the Duluth area, for a family of four, that figure would be $35,700, compared to $50,200 in Minneapolis-St. Paul and $35,450 in Carlton County.
Applicants must also complete a home buyer education course covering the concerns and responsibilities that come with residential property ownership.
Rolle said there is no dollar limit to the program. The commitment from Norwest is that every customer who follows the criteria will be able to get a mortgage.
"We are not basing it on where you live," he added. "The program is based upon the individual, not the geography."
CHAMP is actually a combination of similar programs previously offered by Norwest banks throughout the state.
Unlike some bank mortgages which are packaged and sold, to be held by other entities, Norwest will assume the risks and carry the CHAMP loans. "These loans will be portfolioed by Norwest Banks of Minnesota," Rolle said.
According to Phil Sneve of Norwest, rates will be very similar to other mortgages, though a tiny bit higher, about 1/8 percent.
Closing costs will be a little higher than regular mortgages, but no points will be charged. Costs will include a 1 percent origination fee and a 1 percent program fee.
The real savings to the consumer will be not having to purchase mortgage insurance, typically required on loans with less than 20 percent down.
In working with applicants, Sneve said the bank would use a liberal consideration of credit experience and employment history.
"We're fairly liberal on how we perceive people's credit," he said, "and on employment history we're kinder."
Norwest also has down payment and closing cost assistance programs, and seller contributions may be used in the transaction.
The program can provide mortgages up to $125,000 for a single family home and up to $140,000 for a duplex.
Bank officials said there is no time limit on the program. Its success will be evaluated annually for possible tweaking and enhancement.

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