KeyBank Affirms Commitment to Accessible and Affordable Pathways to Homeownership

Rhea-AI Summary

KeyBank focuses on Special Purpose Credit Programs and home buyer education to make homeownership more accessible and affordable. The initiatives aim to help clients achieve their financial goals amidst perceived barriers to homeownership. KeyBank's efforts include offering up to $5,000 in credits for closing costs, providing affordable home equity loans, and partnering with organizations to enhance financial education and support.

Insights

Financial Analyst

KeyBank's initiatives to provide Special Purpose Credit Programs and educational resources for prospective homebuyers represent a strategic investment in community engagement and financial inclusion. These programs, by offering credits towards closing costs and favorable loan terms, are likely to stimulate mortgage lending, particularly in majority-minority neighborhoods where homeownership rates have historically lagged.

The direct financial impact of these programs can be assessed by examining the increase in mortgage loan applications and the amount disbursed in Home Buyer Credits. These figures, while relatively modest in the context of the overall mortgage market, indicate a growing customer base and could lead to a more stable and diversified loan portfolio for KeyBank.

Long-term, these initiatives could enhance KeyBank's reputation as a community-focused lender, potentially leading to increased customer loyalty and market share in underserved areas. However, the costs associated with these programs and the risk profile of the new loans should be closely monitored.

Economist

The introduction of Special Purpose Credit Programs by KeyBank is indicative of a broader economic trend towards inclusive finance. By facilitating access to homeownership for underserved populations, KeyBank is contributing to economic empowerment and potentially stimulating local economies through increased property ownership.

However, the success of such programs hinges on the broader economic environment, including interest rates and housing market dynamics. While these credits may improve homeownership rates in the short term, the long-term effectiveness will depend on sustained economic growth and stable housing prices. Any downturn could disproportionately affect new homeowners who have benefited from these programs.

Market Research Analyst

KeyBank's focus on homebuyer education and the provision of Special Purpose Credit Programs is a response to a clear market need. The KeyBank 2024 Financial Mobility Survey highlights that a significant portion of Americans view homeownership as unattainable. By addressing this perception, KeyBank is not only expanding its customer base but also aligning its services with consumer demand.

Market research suggests that educational initiatives can be a powerful tool in converting prospects into customers. KeyBank's investment in community partnerships and financial education is likely to resonate with their target demographic, potentially leading to increased brand loyalty and customer retention. However, the effectiveness of these strategies in driving actual home purchases and the return on investment for KeyBank should be continually evaluated.

Special Purpose Credit Programs and home buyer education take center stage this Fair Housing Month

CLEVELAND, April 8, 2024 /PRNewswire/ -- As part of its commitment to helping clients on their individual financial journeys, KeyBank (NYSE:KEY) continues to offer resources and education for those seeking to achieve the dream of homeownership.

KeyBank's Special Purpose Credit Programs¹ and home buyer educational initiatives aim to increase the accessibility and affordability of the homebuying process at a time when a significant portion of Americans feel that homeownership is beyond their reach. According to KeyBank's 2024 Financial Mobility Survey², approximately one-third (29%) of Americans who do not own a home and do not plan on purchasing one in the next 12 months feel that homeownership is not attainable.

"We recognize that the homebuying process can feel daunting and we are committed to helping our clients achieve their financial goals," said Dale Baker, President of KeyBank Home Lending. "KeyBank continues to invest in resources, programs and community partnerships to help clients understand their unique financial pictures, address the barriers to homeownership, and improve their overall financial resiliency."

Special Purpose Credit Programs ease burden of homebuying costs

The KeyBank Home Buyer Credit³ offers homebuyers purchasing eligible properties in designated communities up to $5,000 to be used towards closing costs and prepaid fees that may come with financing their new home. From the program's inception in September 2022, through March 26, 2024, KeyBank funded approximately $1.7 million in Home Buyer Credits, helping 382 clients achieve their dream of homeownership in the qualifying areas where the program is available. Also, as of March 26, 2024, KeyBank has $322.9 million in mortgage loan applications for approximately $2.8 million in Home Buyer Credits to assist 646 clients (inclusive of the funded credits shared above) on their path to homeownership in these locations.

The Key Opportunities Home Equity Loan⁴ provides affordable terms for borrowers with qualifying properties to refinance their primary residence to a lower interest rate, consolidate debt, finance home improvements, or tap into their equity when needed. This loan features a fixed rate, with no origination fee, and a first or second lien option for loans up to $100,000. Since the program began on March 1, 2023, through March 26, 2024, KeyBank funded $10 million in loans, helping 202 clients in designated communities refinance for better terms or access equity in their primary home.

Similar to the Home Buyer Credit, KeyBank Neighbors First Credit⁵ is designed to help homebuyers purchasing eligible properties in qualified areas across Key's footprint and in Florida by providing up to $5,000 to be used for closing costs and to pre-paid fees that may come with financing a new home. Since the launch of the program on July 1, 2023, through March 26, 2024, KeyBank funded approximately $575,000 in Neighbors First credits, helping 115 clients achieve their dream of homeownership in the qualifying areas where the program is available. Also, as of March 26, 2024, KeyBank has $35.7 million in mortgage loan applications for approximately $1.1 million in Neighbors First Credits to assist 223 clients (inclusive of the funded credits shared above) on their path to homeownership in these locations.

Through the KeyBank Home Buyer Credit and KeyBank Neighbors First Credit Special Purpose Credit Programs, Key has $5,000 in purchase credits available to be used towards closing costs and prepaid fees, in over 9,500 census tracts.

Partnerships improve access to home buyer education and resources

The KeyBank 2024 Financial Mobility Survey found that among respondents who purchased a home in the last 12 months or plan to do so in the next 12 months, 1 in 3 (30%) say their ability to understand the homebuying process influenced their purchasing decision.

To this end, KeyBank committed more than $1 million in 2023 to homebuyer education and other community support. Starting in 2022, Key also committed to investing more than $25 million over a five-year period in grants, fee waivers, marketing and branches to increase mortgage lending in majority-minority neighborhoods. Partnerships and initiatives with the National Association of Hispanic Real Estate Professionals (NAHREP®) and Operation HOPE to advance homeownership through financial education are also underway.

"At KeyBank, we believe in turning aspirations into achievable milestones," said Rachael Sampson, KeyBank's Head of Community Banking for the Consumer Bank. "Our continued investments in financial education and homebuying resources for clients in underserved communities reflect our dedication to fostering financial empowerment and making homeownership attainable for all."

Learn more about KeyBank's home lending opportunities and programs, determine whether a property qualifies for Special Purpose Credit Programs, or get started on the journey to homeownership by visiting key.com/communitylending. For details on the current state of local markets and to answer any questions you may have, including whether a property qualifies for Key's Special Purpose Credit Programs, KeyBank Mortgage Loan Officers are available to help.

About KeyCorp

KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $188 billion at December 31, 2023.

Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,200 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank Member FDIC.

Mortgage and Home Equity Lending products offered by KeyBank are not FDIC insured or guaranteed. Equal Housing Lender. NMLS# 399797. CFMA #240325-2518716

NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. All home lending products, including mortgage, home equity loans and home equity lines of credit, are subject to credit and collateral approval. Not all home lending products are available in all states. Hazard insurance and, if applicable, flood insurance are required on collateral property. Actual rates, fees, and terms are based on those offered as of the date of application and are subject to change without notice.

¹ Special Purpose Credit Programs are, generally, programs that are established to meet special social needs or the needs of economically disadvantaged persons by extending credit to persons who would probably be denied credit or would receive it on less favorable terms, under certain conditions. See 15 U.S.C. § 1691(c)(1)-(3); 12 C.F.R. § 1002.8(a).

² The KeyBank 2024 Financial Mobility Survey was conducted online by Schmidt Market Research. 1,000 Americans, ages 18-70, with sole or shared responsibility for household financial decisions, who own a checking or savings account, completed the survey in September 2023. The survey asked respondents about their financial attitudes, understanding, awareness and actions over the prior year.

³ Available on primary residence first lien purchases only. Property must be located in an eligible community as determined by KeyBank. Eligible Communities are subject to change without notice. Additional terms or restrictions may apply. Ask us for details. 

⁴ Loan features reduced interest rate and no origination fees. Available on existing primary residence and loans up to $100,000. First or second lien only. Loan must close in a branch. Property must be located in an eligible community in KeyBank's retail footprint. Additional terms or restrictions may apply. Ask us for details. 

⁵ Available on primary residence first lien purchases only. Property must be located in an eligible community in KeyBank's retail footprint or Florida. Eligible communities are determined by KeyBank and subject to change without notice. Additional terms or restrictions may apply. Ask us for details.

View original content to download multimedia:https://www.prnewswire.com/news-releases/keybank-affirms-commitment-to-accessible-and-affordable-pathways-to-homeownership-302109320.html

SOURCE KeyBank

FAQ

What are KeyBank's Special Purpose Credit Programs focused on?

KeyBank's Special Purpose Credit Programs aim to make homeownership more accessible and affordable for clients.

How much funding has KeyBank provided through the Home Buyer Credit program?

KeyBank has funded approximately $1.7 million in Home Buyer Credits, assisting 382 clients in achieving homeownership.

What is the Key Opportunities Home Equity Loan designed for?

The Key Opportunities Home Equity Loan offers affordable terms for borrowers to refinance their primary residence, consolidate debt, finance home improvements, or access equity.

How much funding has KeyBank provided through the Neighbors First Credit program?

KeyBank has funded approximately $575,000 in Neighbors First Credits, helping 115 clients achieve homeownership.

What partnerships has KeyBank engaged in to enhance home buyer education?

KeyBank has partnered with organizations like NAHREP and Operation HOPE to advance homeownership through financial education.