1st Security Bank Participating in a Pilot Program to Improve Home Financing Options for Accessory Dwelling Units.

Rhea-AI Summary

1st Security Bank has announced its participation in a pilot program aimed at enhancing financing options for accessory dwelling units (ADUs). Successful implementation could lead to broader access across the mortgage industry, benefiting borrowers nationwide. The program allows rental income from ADUs to be counted as qualifying income, potentially increasing borrowers' purchasing power and reducing expenses on cash-out refinances. The initiative supports affordable housing and increases neighborhood density in major metropolitan areas.

Positive

• Participation in a pilot program to improve financing for ADUs.
• Potential to increase borrowers' purchasing power by recognizing ADU rental income as qualifying income.
• Supports affordable housing and reduces homeowner expenses.

Negative

• None.

MOUNTLAKE TERRACE, Wash., Nov. 22, 2021 /PRNewswire/ -- The Home Lending division of 1st Security Bank ("the Bank") announces their participation in a pilot program to improve financing options for accessory dwelling units. If successful in pilot, the Bank expects access to this program to expand across the mortgage industry and help borrowers nationwide.

An accessory dwelling unit, or ADU, may be attached to a house or garage but has its own kitchen, living area, and separate entrance. Also known as a mother-in-law or secondary dwelling unit, when the ADU is used as a rental, income from it can be used to offset the mortgage payment, resulting in a lower housing expense for the homeowner.

"Previously, rental income from an ADU did not count as qualifying income for borrowers," said Donn Costa, Executive Vice President of Home Lending. "This program can significantly increase our borrower's buying power on home purchases and reduce expenses on cash-out refinances."

In large metro areas throughout the country, the ADU is being viewed as a critical method for increasing neighborhood density to support mass transportation, provide multi-generational housing options, increase the availability of affordable rental units, and reduce overall costs for homeowners. 

ABOUT 1ST SECURITY BANK OF WASHINGTON
1st Security Bank of Washington, member FDIC and Equal Housing Lender, provides loan and deposit services to customers at its twenty-one branches, and mortgage services at each branch as well as lending offices in the greater Puget Sound area and the Tri-Cities. FS Bancorp, Inc., a Washington corporation, is the holding company for the Bank.

MEDIA CONTACT
Donna Jacobson
VP, Director of Marketing
E: donna.jacobson@fsbwa.com

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SOURCE 1st Security Bank

FAQ

What is the significance of 1st Security Bank's participation in the ADU pilot program?

1st Security Bank's participation could enhance financing options for accessory dwelling units, allowing rental income to count as qualifying income, thus improving borrowers' purchasing power.

How does the ADU financing program affect homeowners?

The program enables homeowners to reduce their housing expenses by using rental income from ADUs to offset mortgage payments.

When did 1st Security Bank announce its participation in the ADU pilot program?

1st Security Bank announced its participation in the ADU pilot program on November 22, 2021.

What are accessory dwelling units (ADUs)?

Accessory dwelling units (ADUs) are secondary residential units that may be attached to a primary home or exist separately, providing additional living space and potential rental income.

What could be the broader impact of this pilot program on the mortgage industry?

If successful, the program could lead to expanded financing options for ADUs across the mortgage industry, benefiting borrowers nationwide.