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The first lender to offer an unsubsidized WBHL was Androscoggin Bank, a community lender in Lewiston, ME.
Thus, FHA is the largest government program that competes directly with the WBHL, and in the remainder of the paper, we compare the WBHL along several dimensions to a standard 30-year FHA fixed-rate loan.
This is a missed opportunity to promote wealth building, which could be addressed by adding the WBHL to the lineup of loans offered by state programs.
To begin the comparison, rows 1-3 show that the FHA loan entails a larger initial payment at closing than either WBHL because the FHA downpayment exceeds the 3 percent rate buydown on the 15-year WBHL and the 2 percent upfront mortgage insurance premium on the 20-year WHBL.
The key result is that the 20-year WBHL has a slightly lower monthly payment than the 30-year FHA loan.
For the 15-year WBHL, the very rapid equity buildup leaves the monthly payment about $150 above that with the FHA loan.
Figure 4 compares two versions of the WBHL with various 15- and 30-year FHA and Fannie Mae products.
By comparison, the two versions of the WBHL permit the borrower to purchase houses priced to $158,360 and $169,784.
And the common-denominator rationale that the designers hope will drive demand for the WBHL is this: offering a way for borrowers to accumulate housing wealth by their mid-40s so that by age 45 or so, the homeowner has no housing debt.
How nice, that with this new loan program the money is there for education, it's been banked thanks to the WBHL. No debt need be incurred.
The WBHL is part of a larger storyline that provides a simple, straightforward plan for savings and spending across the decades of a person's life cycle, from post-high school to retirement.
At age 30, the borrower buys his or her first home with a WBHL, ideally using savings for a buydown of the interest rate, and continues with matched 401(k) contributions.
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