The Acorn Loan

by Roberta Murphy

The Acorn loan isnt exactly a financing program for luxury homes (particularly in San Diego, San Francisco and Manhattan), but how about for friends, kids and relatives who may need some help in purchasing or refinancing their homes? I have already spread the news among certain clients, nieces and nephews throughout the country, and am the new heroine of real estate. The Acorn Loan is probably one of the best-kept secrets in real estate.

Almost by accident, I learned about the ACORN loan program earlier last year. Initially, it sounded too good to be true for our San Diego real estate market. I was to stand corrected. Judy Miller with Bank of America Mortgage explained that a borrower could receive below-market rates and amazing terms if the following criteria (regionally adjusted) were met:

1. Adjusted gross income less than $92,000 per year

2. Home loan under $500,000

3. One home only. Good for not only first time homebuyers, but any homebuyer who owns only one property.

4. Also good for refinancing (out of riskier mortgages, perhaps?)

The benefits?

1. Below-market rate with no points.

2. No PMI (private mortgage insurance)

3. Very liberal debt-to-income ratios.

4. Very low down payment required (0-5%)

5. Underwriting will credit some “cash” income and alternative sources of credit.

Immediately after hearing about this program, a qualified client (48k per year income) came in and we located a lovely La Costa townhome ($435k) that was ideal for her roommate situation. She had sold her home in Northern California and had a reasonable down payment (not necessarily required for the ACORN loan program). She took the one-day class on home ownership required by ACORN, and afterwards met with her counselor to obtain a loan certificate. She brought that to Bank of America, who processed and funded the loan. It was amazingly simple, and we were able to close within 45 days.

The loan terms? Fixed interest rate was slightly-below-market (no prepayment penalty or points): Ten years interest only which will automatically convert to a fully amortized 30 year loan at the initial rate.

For additional information, go to: http://acornhousing.org

For a nationwide lender who is familiar with and can process and fund these loans, call Judy Miller at Bank of America Mortgage: 888-427-2936 or contact the above link.

I am very impressed with the program, and have other clients enrolling in the classes. It’s a terrific prequalification tool for Realtors and the best loan program I have seen for qualified buyers.