One of the most needed resources for clients who wish to purchase a home is down payment assistance. But in 2020 when some federal and state funds were diverted to assist homeowners and renters to stay in homes during the height of the pandemic, the emergence of wholesale and some proprietary DPA programs came to the forefront. This not only expanded the availability of needed DPA funds but also provided awareness of the variety of programs with a slight advantage to mortgage brokers who can utilize wholesale DPA in addition to city, county SHIP, and most state programs.
Homebuyers who need closing costs assistance from the seller often compete with cash buyers and flippers who don’t. Any advantage for the homebuyer is sought and down payment assistance can provide that advantage by providing funds needed for down payment and/or closing costs through a DPA source rather than seller assistance.
Down Payment Assistance Resources
Down payment assistance has been available to consumers for a long time, but the variety of programs available now has not. For loan originators that wish to use as many of these sources as possible, Down Payment Resource offers this variety state by state. The site is included on Stellar MLS platforms for real estate agents to sift through for available DPA to refer to clients.
Loan originators can generate leads from this source as well (for a fee) on the Down Payment Connect side with a personal landing page and website link promoting that the loan originator can provide DPA programs for interested clients. Customized selection of which programs a loan originator can provide that will show up for qualified clients is included.
Matching The 1st Mortgage To The Second DPA Loan
The biggest problem loan originators have with down payment assistance is matching the DPA guidelines with the 1st mortgage product. Many originators have had the experience where a client fits all of the criteria for the first mortgage, but the loan is denied for criteria not met with the down payment program. The best benefit of all (to me!) with Down Payment Connect is the detailed description for ALL down payment programs on their own page, including who to contact and an updated status on funds availability at the top of each program description.
Some DPA programs are offered by resources that provide a blended 1st and 2nd mortgage program so that client qualification criterion is easily matched. Land Home Financial Services, a national wholesaler that provides a blend of the 1st and 2nd mortgage, offers an easy to follow yet comprehensive DPA Program Comparison Matrix for the FHA and two conventional programs that their company offers.
And, even if the DPA program that is offered is only a second mortgage that needs to be matched with a first mortgage, the Down Payment Connect DPA Directory provides a link to participating provider lender websites to check criteria.
The difference on how to input DPA grants and 2nd mortgages in the NEW URLA and Fannie Mae DO/DU correctly coming up!
Contact me today to learn more about loan options for every type of buyer. Call 727-534-3445.