For example, there are now loans that provide an added bit of security for an estimated 16 million professionals who often fall under the classification of first responders. Meanwhile, some lenders are targeting rural home buyers who want to be part-time farmers, while others are offering products to international borrowers who purchase vacation homes in the U.S.
Bank of America was inspired to add an insurance feature to its community-lending product by one of its borrowers, Adam Pierce, a 26-year-old Orange County, Fla., sheriff's deputy who was wounded while on duty in 2005 and left paralyzed.
Police officers such as Pierce, who was shot twice while chasing a suspected drug dealer, face the constant threat that they could be severely injured, wounded or even killed in an instant, and they understand and accept the dangers of their jobs.
But with BofA's Neighborhood Champions Protected Mortgage, at least they'll have peace of mind knowing their families will be protected should tragedy strike. Under the program, the mortgages of police officers, firefighters and medical workers will be repaid up to $300,000 in the event of accidental death, permanent paralysis or dismemberment. Teachers also are covered under this insurance feature.
Coverage, which is free, applies to the first two listed co-borrowers. Better yet, borrowers do not have to qualify, and they receive the insurance regardless of their health status.
Bank of America has grandfathered more than 8,000 existing Neighborhood Champion borrowers into the program, which is aimed at basic housing affordability issues confronting those who are employed in what one of the country's largest financial institutions calls "occupations of honor."
Many also consider farming to be an honorable occupation. Home buyers who farm as a sideline are eligible for mortgages of up to $3 million from Farmer Mac, a government-sponsored enterprise similar to Fannie Mae and Freddie Mac.
Known formally as the Federal Agricultural Mortgage Corp., the little-known government-sponsored enterprise was created by Congress in 1988 to produce a secondary market for agriculture real estate and rural housing mortgages, thereby increasing the availability of long-term credit for farmers, ranchers and rural homeowners.
Farmer Mac doesn't make mortgages directly to borrowers. Rather, it buys the loans made by local lenders. And among the products it buys are part-time farm/residential loans. Under the program, properties must be owner-occupied, single-family detached residences or second homes with enough acreage to support agricultural production. The property can't be just a house on a large lot or in the woods somewhere.
There are no minimum or maximum acreage requirements. But if the property is less than 5 acres, a minimum of $5,000 in annual gross sales of agricultural products must be documented. There is no income requirement for properties larger than five acres.
The large number of international home buyers is another intriguing target for lenders. According to the National Assn. of Realtors, one-third of its members had at least one international client between April 2006 and April 2007. Of those, more than half sold their clients stateside houses.
"All real estate is local, but all buyers are not," says Lawrence Yun, chief economist for the Realtors' group. "We live and do business in a global economy. And with the weak U.S. dollar, compared to the euro, U.S. real estate is now selling at a 30% to 40% discount compared to five years ago."
Foreign nationals often pay cash for their second-home vacation properties. But if they want a mortgage, there are plenty of lenders from which to choose, especially in the hotbed markets of Florida, California and New York, where the international set likes to hang out.
"The timing of foreign nationals' interest in the U.S. is ideal," says Paul Decoff, executive vice president of lending operations at Thornburg Mortgage in Santa Fe, N.M. "As a relatively new and underserved demographic market, international borrowers can be targeted to help alleviate slowing originations that are a result of a softer housing market."
Of course, documenting foreign borrowers is a tad more onerous than underwriting a loan for U.S. citizens. For example, they must provide valid identification in the form of a visa, entry permit or a citizen's ID. Miamibased lender Q Financial Direct also wants a certificate of foreign status (IRS form W-8BEN).
And most lenders require international customers to have the equivalent of 12 months of principal and interest payments safely deposited away in an American bank account.
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source: latimes.com
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