Lower Launches 1% Down Payment Mortgage Program

Lower announced on Wednesday the launch of a new mortgage program named ONE by Lower, designed to significantly reduce the initial financial burden for eligible homebuyers. This program permits qualified individuals to contribute as little as 1% of the home's purchase price as a down payment. Complementing this low down payment requirement, Lower provides a lender grant equivalent to 2% of the purchase price, with a maximum cap of $4,500. This grant is structured to be a direct financial benefit to the buyer, as it does not require repayment, carries no recapture provisions, and does not create a secondary lien on the property.

The introduction of ONE by Lower comes at a time when affordability in the housing market is a major concern for many prospective buyers. Elevated home prices, coupled with rising mortgage rates and persistent inflation impacting everyday expenses, have made it increasingly difficult for individuals to save for substantial down payments. Lower CEO Dan Snyder expressed the company's motivation behind this initiative, stating his desire to facilitate the "American dream" of homeownership, which he views as a critical pathway to building wealth. He highlighted that the company is investing millions of dollars to support members in achieving homeownership and establishing a secure financial future.

Craig Montgomery, president of Lower’s retail division, elaborated on the program's genesis in an interview with HousingWire. He explained that the company identified a common obstacle for many potential homeowners: they possess the necessary income and credit scores to qualify for a mortgage but lack the substantial savings typically required for a down payment. Montgomery pointed out the challenges posed by economic conditions such as rising gas prices, increasing inflation, and higher grocery costs, which deplete household budgets and make saving for a down payment a secondary concern when individuals are focused on immediate financial survival. Lower perceives the grant as a strategic financial investment aimed at broadening access to homeownership, rather than simply a cost passed on to consumers. This approach underscores the company's commitment to overcoming the financial barriers that prevent many from entering the housing market.