Equal Housing Lender
Homeownership Education on Down Payment and Unique Mortgage Products Can Help Make Housing Attainable
Pam Marron • Aug 19, 2021
U.S. Housing supply has become less affordable, and what is available is in short supply. Homeownership education can introduce prospective homebuyers to down payment assistance (DPA), unique mortgage programs and can give clients the ability to be competitive in today’s housing market.
In a recent study by Fannie Mae, 55% of future homebuyers believe that homeownership is out of reach for them financially. In the same study, future homebuyers were asked to demonstrate their knowledge of the mortgage process and the affordable options available. Among respondents,73% were unaware of lower down payment options that range from 3% to 5% of a home’s purchase price. This is an important realization, considering that 31% cited not being able to come up with a down payment as one of the key challenges holding them back from homeownership.
Fannie Mae research also found that 64% of future homebuyers said that they expect mortgage lenders to educate them on the process, and 63% said they want mortgage lenders to show them the right mortgage options for their needs.
Finding the right resources for your clients can be tricky. Some down payment assistance programs are stand alone 2nd mortgages that can be attached to FHA and conventional loans, while others are a one stop 1st and 2nd mortgage mortgage underwritten at one lender for both. Most have income and 1st time homebuyer limitations but a few don’t have a maximum income limit.
Because there are so many details when matching 1st mortgages with a DPA program, many loan originators don’t want to do this type of financing.
But the benefit for a buyer of having down payment assistance is there is little or no need for the seller to contribute towards closing costs.
At Clients2Homeowners.com, the
Down Payment Assistance tab under
Get Mortgage Ready introduces clients, loan originators and real estate agents to Down Payment Resource, a national down payment assistance database. The
DPA Programs tab provides a searchable list of city, county SHIP and state DPA as well as proprietary wholesale programs. And the
DPA FAQ’s tells you how to apply for down payment assistance.
For more information, go to the links provided above to get started. If you are a client, loan originator or realtor who wants to learn more about programs in your area, contact Pam today,
www.closewithpam.com or call 727-534-3445.
Pamela M Marron, NMLS#246438
Innovative Mortgage Services, Inc, NMLS#250769
Down Payment Connect is already being used by MLOs and Realtors. Now it's available to HUD Counselors through HomePrep! Down payment assistance is quickly rising to the top need for clients wishing to purchase a home. Down Payment Connect , the back-end data provider for the parent Downpaymentresource.com , houses every down payment assistance program in the US and provides extremely detailed information laid out in a consistent format for each DPA program in their system. Throughout the last two years, Downpaymentresource.com administrators have worked with MLO’s and the HomePrep developers to add nearly all wholesale down payment assistance programs to their platform and they didn't stop there! Extensive filters that allow for selection of specific client needs such as type (ie. SFR, manufactured homes, condos, multi-family, ADU’s), uses like renovation, above AMI income levels, non-1st time homebuyers are just a few of the filters you will find along with stand alone 2nd mortgages, combined 1st and 2nd mortgages and grants. DownpaymentResource.com is also in many MLS systems across the US and provides limited directory information and a free landing page for realtors to promote that they use DPA. Both MLO’s and realtors can subscribe to Down Payment Connect to get more of the extensive directory and back-end tools. Now, through HomePrep, HUD counselors can also use the Down Payment Connect system to filter trhough DPA programs that clients are qualified for, and can even provide wholesale programs when working with an independent loan originator (often called a mortgage broker)! Through HomePrep, HUD counselors are now able to provide MLO’s and clients with the DPA programs that they have found the client is eligible for.
If you have FFEL Student Loans, Take Action Before April 30th!
Three great tools that mortgage loan originators (MLO) can use to assist clients who need help with credit, down payment assistance and student loan repayment services have been used, fine-tuned and are already in use with individual MLO’s. These tools combined with the Freddie Mac HomeCoach automated system along with budgeting help and Homebuyer Education are all integrated in the HomePrep online platform that connects MLO’s with clients who have challenges to HUD counselors that get them mortgage ready.
Pam Marron, NMLS# 246438
Innovative Mortgage Services, Inc. NMLS# 250769
