Chase Home Lending Offers Financial and Educational Resources for Homebuyers; Increases Closing Guarantee to $20,000

Rhea-AI Summary

Chase Home Lending has increased its Closing Guarantee for homebuyers from $5,000 to $20,000, addressing the housing affordability crisis characterized by high interest rates, home prices, and low supply.

Additionally, Chase offers low down payment options as low as 3% and flexible credit guidelines to broaden homeownership opportunities. Since 2020, Chase has provided over $96 million in Homebuyer Grant funds to more than 29,000 customers. In 2023, it connected buyers with approximately $15.8 million in state and local homebuyer assistance programs.

Chase’s educational resources include a Homebuyer Education Center and the award-winning podcast Beginner to Buyer, which provides insights into the homebuying process. The Chase Closing Guarantee ensures on-time closing within three weeks, or buyers receive $20,000 if eligible.

This offer is available until July 27, 2024.

Positive

• Chase increased its Closing Guarantee from $5,000 to $20,000, enhancing buyer confidence.
• Provided over $96 million in Homebuyer Grant funds to more than 29,000 customers since 2020.
• Connected buyers with approximately $15.8 million in state and local homebuyer assistance programs in 2023.
• Offers low down payment options starting at 3% to improve affordability.
• Flexible credit guidelines to support a broader range of homebuyers.
• Provides comprehensive homebuyer education resources, including the Homebuyer Education Center and the podcast Beginner to Buyer.
• Guarantees an on-time closing in three weeks or offers $20,000 to eligible buyers, enhancing market competitiveness.

Negative

• Current housing market conditions with high interest rates, home prices, and low supply.
• The -time offer for the increased closing guarantee, expiring on July 27, 2024, dilutes long-term benefits for future buyers.
• Potential challenges for buyers in gathering necessary financial documentation for the closing guarantee.

Insights

Financial Analyst

Chase Home Lending's move to increase its Closing Guarantee from $5,000 to $20,000 demonstrates the bank's confidence in its ability to close loans efficiently and on time. This substantial increase could alleviate potential buyer concerns about the timeline, making Chase a more attractive option in a competitive market.

The bank has provided over $96 million in Chase Homebuyer Grant funds since 2020, indicating a strong commitment to supporting homeownership, particularly in low-to-moderate income areas. This aligns with their strategic goal to expand their customer base across various income spectrums.

From a financial perspective, these initiatives could potentially increase Chase's mortgage origination volumes, leading to higher revenue in the long term. However, the financial outlay for the increased Closing Guarantee and homebuyer grants could temporarily impact short-term profitability. Investors should monitor how these initiatives impact Chase's market share and loan performance over the next few quarters.

Market Research Analyst

Chase's efforts to address housing affordability through grants and educational resources reflect a broader trend in the financial services industry aimed at increasing accessibility to homeownership. The increase in the Closing Guarantee to $20,000 is particularly notable as it may set a new benchmark in the industry for closing assurances.

The extensive use of homebuyer grants, especially in majority-Black, Hispanic, or Latino census tracts, shows a targeted approach to tap into underserved markets, which could enhance Chase's reputation and customer loyalty in these communities. This strategy could also foster greater competition among banks and nonbank lenders, potentially leading to more favorable terms for consumers across the market.

For investors, this approach could signal long-term growth opportunities driven by customer acquisition and retention, particularly in diverse and growing demographic segments. However, it is essential to consider the execution risk and whether Chase can sustain these initiatives without adverse effects on its operating margins.

Mortgage Industry Expert

The increased Closing Guarantee and comprehensive educational resources from Chase Home Lending reflect a proactive approach to addressing current challenges in the housing market. High interest rates and home prices, coupled with low supply, have made home buying more difficult. By offering low down payment options and flexible credit guidelines, Chase is making homeownership more accessible to a broader audience.

The emphasis on homebuyer education, through platforms like the Homebuyer Education Center and the 'Beginner To Buyer' podcast, provides valuable tools for prospective buyers to navigate the complexities of the mortgage process. Educating consumers could lead to better-informed decisions, potentially reducing default rates and enhancing loan quality.

Additionally, Chase's digital tools and resources, such as Chase MyHome and various mortgage calculators, streamline the buying process, offering convenience and speed that could be important in a competitive market. These technological advancements not only enhance customer experience but also position Chase as an innovative leader in the mortgage industry.

The bank has provided more than $96 million in Chase Homebuyer Grant funds since 2020

NEW YORK--(BUSINESS WIRE)-- The housing affordability crisis—with high interest rates, high homes prices, and low supply—has been widely reported. To help homebuyers address these challenges, Chase Home Lending is focused on providing financial resources and homebuyer education, including increasing its Closing Guarantee from $5,000 to $20,000.

“Current market dynamics have impacted the affordability of homeownership for many Americans, and at the same time, competition has only increased,” said Sean Grzebin, head of Consumer Originations for Chase Home Lending. “We’re focused on the things we can control in this environment and that’s supporting our customers all the way home. Increasing our Closing Guarantee to $20,000 is a reflection of our confidence in getting customers into their new home without delay.”

Affordability and Access to Credit

Chase offers low down payment options—as low as 3%—and flexible credit guidelines to create more homeownership opportunities for more people across the income spectrum. Another way Chase is helping customers manage affordability is with the Chase Homebuyer Grant. This grant offers up to $7,500 in eligible areas, which can be combined with state and local homebuyer assistance, to lower the interest rate and/or reduce closing costs and down payment.

Since 2020, Chase has provided more than $96 million in Chase Homebuyer Grant funds for more than 29,000 customers. In 2023, Chase also connected homebuyers with approximately $15.8 million in state and local homebuyer and down payment assistance programs. Buyers can use Chase’s Homebuyer Assistance Finder to research assistance programs for which they may be eligible.

Chase launched its grant program nationally in 2018 with a $2,500 grant for people buying in low-to-moderate income census tracts. Then in 2021, the bank launched a $5,000 homebuyer grant in census tracts designated as majority-Black, Hispanic or Latino under its Special Purpose Credit Program (SPCP), in accordance with the federal requirements of the Equal Credit Opportunity Act (ECOA) and Regulation B. Recently, the bank increased this grant from $5,000 to $7,500 in 15 markets across the U.S.:

• Atlanta, GA
• Chicago, IL
• Dallas, TX
• Fort Lauderdale, FL
• Fort Worth, TX
• Houston, TX
• Las Vegas, NV
• Los Angeles, CA
• Miami, FL
• New York, NY
• Orlando, FL
• Phoenix, AZ
• Riverside, CA
• San Diego, CA
• Washington, DC

Homebuyer Education

The homebuying process can be overwhelming, whether you’re a first-time or experienced homebuyer. Chase is helping to educate prospective buyers on the ins and outs of the home purchase process, homeownership and everything in between. The JPMorgan Chase Institute recently released research calling out the importance for consumers to be educated when it comes to their mortgage and lender options. The Institute’s report, Hidden Costs of Homeownership: Race, Income, and Lender Differences in Loan Closing Costs, reveals that closing costs vary significantly by type of lender, with banks being less expensive on average than nonbanks and brokers.

“Homebuyers don’t always realize what’s negotiable and what may differ from lender to lender,” said Grzebin. “Being informed can help save you money in the long run. I’d advise customers to make lenders compete for your business—take the time to consult with more than one lender and always check with your bank.”

Additional resources include Chase’s Homebuyer Education Center—a comprehensive learning center for those looking to buy a home and get a mortgage. Chase’s award-winning podcast, Beginner To Buyer comes complete with two seasons of episodes featuring conversations with real buyers and expert guests discussing homebuying and ownership, home equity, common misconceptions, renovations, and investment properties.

Convenience and Speed to Close

A quick closing process can be key, especially in competitive situations. The Chase Closing Guarantee commits to an on-time closing in as soon as three weeks or eligible customers get $20,000. This limited time offer is available for qualifying customers purchasing a home with a Chase mortgage until July 27, 2024. Customers must submit necessary financial documentation and provide a fully-executed purchase contract. Then, Chase will close the loan on or before the contract closing date or pay the buyer $20,000. Funds can be used to discount underwriting fees paid at mortgage closing or pay down the interest rate and down payment.

Chase continues to offer a full suite of digital tools to support buyers on the path to homeownership, including Chase MyHome. This digital platform provides “all things home, all in one place” with an advanced property search and the ability to review loan options, apply for and manage your mortgage. Additionally, Chase offers various digital mortgage calculators that help buyers understand how much they can afford.

For more information about Chase Home Lending, visit Chase.com/afford.

About Chase

Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading financial services firm based in the United States with assets of $4.1 trillion and operations worldwide. Chase serves more than 82 million consumers and 6.4 million small businesses, with a broad range of financial services, including personal banking, credit cards, mortgages, auto financing, investment advice, small business loans and payment processing. Customers can choose how and where they want to bank: More than 4,800 branches in 48 states and the District of Columbia, more than 15,000 ATMs, mobile, online and by phone. For more information, go to chase.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516611976/en/

Contact:

Ashlei Bobo, ashlei.n.bobo@jpmorganchase.com

Source: JPMorgan Chase & Co.

FAQ

What is the new Chase Closing Guarantee amount?

The new Chase Closing Guarantee amount is $20,000, increased from $5,000.

What is the eligibility period for the Chase Closing Guarantee?

The eligibility period for the Chase Closing Guarantee is until July 27, 2024.

How much has Chase provided in Homebuyer Grant funds since 2020?

Chase has provided more than $96 million in Homebuyer Grant funds since 2020.

What are Chase's down payment options?

Chase offers down payment options as low as 3%.

How much did Chase connect homebuyers with in state and local assistance programs in 2023?

In 2023, Chase connected homebuyers with approximately $15.8 million in state and local assistance programs.

What educational resources does Chase provide for homebuyers?

Chase provides a comprehensive Homebuyer Education Center and the award-winning podcast Beginner to Buyer.

What does the Chase Closing Guarantee include?

The Chase Closing Guarantee includes an on-time closing within three weeks or $20,000 to eligible buyers.