If you want to get ahead in the housing market, both in helping borrowers get into homes and setting yourself up as someone that can make nearly any deal work, you need to get in the know with down payment assistance (DPA).
Consider, for example, some points that Luz Keuler (editor at Readynest by MGIC) made in an article published on DownPaymentResource.com (How Offering DPA Programs Can Set You Apart):
· Bust the 20% Down Payment Myth: Starting a conversation with your borrowers about down payment assistance can help you show them that they don’t need a 20% down payment to buy a home, or any down payment at all. (Over 50% of gen Zers don’t know how big a down payment needs to be, or assume a down payment must be 20% or more.)
· Talk About the Advantages of Mortgage Insurance: That same conversation can also let you educate your borrowers on mortgage insurance, how much it costs, and how it can enable them to purchase homes that might otherwise be out of their reach without a smaller down payment (and down payment assistance).
· Reveal the Strategies: Down payment assistance opens up a world of opportunities for homebuyers. Sure, some might go to the obvious answer of buying a more expensive home with a smaller down payment, but borrowers could also purchase a home in their existing budget and retain savings, or purchase a fixer-upper and get the home repaired shortly after closing with personal funds saved through down payment assistance. It’s also worth noting that many DPA programs don’t require a borrower to be first-time.
And there are many other tips and tricks that may help you fully utilize the opportunities of down payment assistance to help your borrowers get their foot into the door of homeownership, so to speak. For example, forgivable and grant DPA programs don’t come with a monthly payment, so they don’t increase your borrower’s DTI.
Take, for example, CBC Mortgage Agency’s Chenoa Fund DPA for FHA Loans Program. This is a down payment assistance program offered in every US state (except for New York). This program offers repayable and forgivable assistance, has no DTI restrictions, and allows for manufactured housing and manual underwrites.