Wells Fargo extends $5,000 closing cost credit

Wells Fargo’s program that provides up to $5,000 in closing costs for low- and moderate-income families to purchase a home has been extended to an additional 16 metro areas, the bank announced on Monday.

The credit is available for borrowers with combined incomes of up to 80% of their area’s median income who are seeking to purchase a home as a primary residence. It can be used to pay nonrecurring closing costs, such as appraisal, processing, title and recording fees.

In addition to many previously announced markets, the program is now available in the California metro areas of Anaheim, Sacramento, San Diego, San Francisco and San Jose; the Texas metros of Austin and San Antonio; the Florida metros of West Palm Beach, Fort Lauderdale and Miami; the North Carolina metros of Greensboro and Raleigh; Denver; Las Vegas; Phoenix; and Portland, Oregon.

Wells Fargo, which was among the top 25 U.S. mortgage lenders in the first quarter of 2024, estimates that as of April 30, more than 4,500 customers have used the closing cost credit. It is available for conventional, conforming and U.S. Department of Veterans Affairs (VA) loans with either fixed or adjustable rates.

“Expanding the availability of the Dream. Plan. Home. closing cost credit is another key component of Wells Fargo’s efforts to help drive economic growth, sustainable homeownership, and neighborhood stability in low- to moderate-income communities,” Kevin Reen, head of Wells Fargo Home Lending, said in a prepared statement. 

In August 2023, Wells Fargo also announced a down payment grant program that offers $10,000 to eligible buyers. 

Since January 2023, the bank has changed its strategy in home lending to focus on bank customers and minority homebuyers through its retail mortgage teams. This has resulted in the bank exiting the correspondent channel and shrinking its servicing portfolio. 

Wells Fargo’s mortgage origination volume declined to $3.5 billion during the first quarter of 2024, down 22% quarter over quarter and down 38% year over year. Its mortgage servicing rights — measured by the carrying value at the end of the period — declined by 3% quarter over quarter to $7.2 billion in Q1 2024.