Rocket Mortgage EVP: Addressing Affordability Is A Top Priority
By KIMBERLEY HAAS
As the housing market moderates after a whirlwind pandemic ride, affordability continues to be a chief concern for consumers and mortgage providers are responding with a variety of programs to encourage potential buyers to get off the sidelines.
Leaders at Rocket Mortgage say that a major hurdle on the path to homeownership for their clients is saving for closing costs and earlier this month they announced a national program where buyers can receive help through BUY+, a collaboration with Rocket Homes.
Buyers can receive a credit of 1.5% of their loan amount – up to $10,000 off their closing costs – by working with a Rocket Homes Partner Agent. Those working with an unaffiliated real estate professional who refers them to Rocket Mortgage and buyers opting for a Verified Approval can receive a 0.75% credit of their loan amount to put toward closing costs, according to a press release.
Bill Banfield, Executive Vice President of Capital Markets at Rocket Mortgage, recently sat down with The Mortgage Note to talk about the BUY+ program and their efforts to tackle affordability issues.
“Affordability is on everybody’s mind. Home prices, interest rates, I mean it is a top conversation we have with clients as we figure out what kind of home they want to buy or if they decide to stay where they are. This is what they are talking about. And so, what we have been focused on is providing options that a buyer can use to make the transaction less expensive,” Banfield said.
Banfield said the new program is already providing a meaningful impact.
“We’ve been listening to phone calls and our clients have been very excited about it,” Banfield said. “They’re used to thinking about, ‘How much money is it going to cost to buy my next home?’ So to get relief in that regard is to address the number one concern any buyer has.”
Banfield said leaders at Rocket Mortgage have been focused on affordability for some time.
An Inflation Buster program was made available to consumers last fall, giving homebuyers a reprieve by reducing their monthly mortgage payment by one percentage point for the first year of their loan.
Company leaders also announced a conventional loan option for people interested in purchasing or refinancing a manufactured home. Banfield said at the time that this offers consumers additional options for housing.
Leaders at Rocket Mortgage have also been rolling out programs to serve potential homebuyers in underserved communities.
They announced last month that the company is the first national lender to offer Freddie Mac’s BorrowSmart Access program, which has a $3,000 credit for first-time homebuyers to use toward their down payment.
To qualify for this program, the buyer must have an income equal to or less than 140% of the area median income and meet all other Freddie Mac lending guidelines. The purchase must take place in an eligible county within one of 10 metropolitan areas.
The cities include Detroit, where Rocket is headquartered, Atlanta, Chicago, El Paso, Houston, McAllen, Memphis, Miami, Philadelphia, and St. Louis.
In December, Purchase Plus was introduced. That program offers up to $7,500 in credits for first-time homebuyers to use toward their mortgage costs. Eligible cities include Detroit, Atlanta, Baltimore, Chicago, Memphis, and Philadelphia.
“What we’ve seen, regardless of area median income, is that helping people with the down payment is making a very positive difference to help create affordability,” Banfield said at the time. “In the hierarchy of what matters, that’s usually number one, being able to save for a down payment and closing costs. Number two is building up your credit.”
Affordability was one of the issues brought up last week at the Mortgage Bankers Association’s National Advocacy Conference.
The conference was held at the JW Marriott in Washington, DC. MBA members learned about the political and market landscapes on Tuesday before speaking with their elected state representatives on Wednesday.
Over 300 members from 39 states participated in those Capitol Hill meetings.
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