Wells Fargo & Company (WFC - Analyst Report) announced the launch of its CityLIFT program in Oakland during December 7–8. The program, which is valued at $5 million, is intended to extend down payment assistance and homebuyer education programs in the Eastern Bay region.
As per the program, Wells Fargo will provide $20,000 to qualified buyers for a down payment. The bank will also offer a viewing center so that buyers can undertake virtual tours of homes they might want to buy within the nine East Bay cities. These cities include Oakland, Fremont, Hayward, Concord, Antioch, Bay Point, Brentwood, Pittsburg and Richmond.
In order to qualify for down payment assistance, applicants are required to fulfill certain criteria, such as annual income not exceeding 120% of the median income for the area. Further, prospective buyers need to complete an eight-hour homebuyer education session with a HUD-approved counselor, such as The Unity Council. In addition, the buyers are required to commit that they would stay in the house for five years. The company anticipates about 250 homebuyers to benefit through this program.
Wells Fargo unveiled CityLIFT to provide down payment support and homebuyer education programs in areas that are highly affected by the financial crisis. The program was developed in connection with the settlement with the U.S. Department of Justice in 2012. Also, the program is an alliance between Wells Fargo Bank N.A. and NeighborWorks America.
The company has already launched this program in the cities of Atlanta, Chicago, Houston, Jacksonville, Las Vegas, Los Angeles, Miami, Orlando, Philadelphia, Phoenix, Sacramento, Tampa, Twin Cities and Washington, D.C. Nearly 785 buyers have been benefited by CityLIFT in these cities along with an estimated 546 probable buyers on the verge of inking the deal.
Besides East Bay, Alameda and Contra Costa counties are also part of the twenty housing markets that will benefit from a total of $170 million, which Wells Fargo has committed through its LIFT programs (including NeighborhoodLIFT and CityLIFT) to support sustainable housing in cities affected by the economic crisis.
Such initiatives by Wells Fargo would help homebuyers achieve sustainable homeownership. Moreover, these actions will boost the company’s loan portfolio.
Wells Fargo currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We believe that these initiatives, though positive, are unlikely to result in powerful upward estimate revisions for the stock. Another financial institution in the same sector namely JPMorgan Chase & Co. (JPM - Analyst Report) retains a Zacks #2 Rank (translating into a short-term Buy rating).