Zillow, the real estate platform, has initiated a program to help individuals unable to enter the housing market due to rising interest rates.
Through Zillow Home Loans, eligible homebuyers in Arizona can access mortgages with a 1% down payment option, with an additional 2% contribution from Zillow at closing.
The program is set to expand to other markets in the future.
“For those who can afford higher rent payments but have been held back by the upfront costs associated with homeownership, down payment assistance can help to lower the barrier to entry and make the dream of owning a home a reality,” said Zillow Home Loans’ senior macroeconomist Orphe Divounguy.
The company states that the program will shorten the usual duration needed for saving up a down payment.
“The rapid rise in rents and home values means many renters who are already paying high monthly housing costs may not have enough saved up for a large down payment, and these types of programs are welcome innovations in lowering the potential barriers to homeownership for those who qualify,” Divounguy said.
According to The Mortgage Bankers Association (MBA), as of Wednesday, mortgage rates hit their highest level since 2000, with the average rate for a 30-year fixed-rate mortgage rising to 7.31% from the previous week’s 7.16%.