By KIMBERLEY HAAS
The new vice president of public policy at Rocket Central says his goal is to increase opportunities for people who have historically had difficulties achieving home ownership because of a host of barriers.
Karan Kaul, a housing finance veteran who worked as a principal research associate in the Housing Finance Policy Center at the Urban Institute prior to joining Rocket, said that means focusing on first-time homebuyers, people of color, and low- to moderate-income borrowers.
In a recent interview with The Mortgage Note, Kaul said a well-documented hurdle to homeownership is a lack of an adequate down payment, especially with the increase in home prices over the last decade.
“So what can we do to make sure we can house more people that may not have saved for a down payment but are financially responsible?” Kaul said.
Special purpose credit programs can help, he said. These programs are designed for people in communities that Fannie Mae and Freddie Mac have determined could be underserved and often have a higher percentage of people of color.
Leaders at Rocket Mortgage announced in March they are 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.
Kaul said policymakers and private business leaders can benefit from working together to make sure they are on the same page when it comes to products and innovations that maximize homeownership opportunities.
“We’re in the trenches making these mortgages day in and day out, talking to potential borrowers who are looking to buy a home. Some have already made an offer on a home and are looking to get a mortgage, so really the lender on the ground has a good sense of what the origination market is looking like at any given point in time and what consumers are looking for,” Kaul said.
Kaul is located in Washington, DC, and said they are already working with partners there to make sure the concerns of consumers are heard.
Although his focus is on policy and not lawmaking, Kaul said if asked for feedback from elected officials, they will be honest brokers of information.
Housing affordability continues to be a hot topic.
Attendees at the Mortgage Bankers Association’s National Advocacy Conference shared concerns about housing affordability last month while meeting in Washington, DC.
Robert Broeksmit, president and CEO of the MBA, told those in attendance that a key talking point while meeting with lawmakers was increasing homeownership opportunities for low- and moderate-income borrowers.
Over 300 members from 39 states participated in Capitol Hill meetings during the conference, according to organizers.
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