Underserved Communities: Rocket Offers Programs To Help Buyers Secure Mortgages
By KIMBERLEY HAAS
Leaders at Rocket Mortgage have been rolling out programs to serve potential homebuyers in underserved communities.
They announced last week 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.
CEO Bob Walters mentioned the impact homeownership has on generational wealth while commenting on both programs.
“By offering solutions for borrowers in underrepresented communities, we can help families build financial freedom and generational wealth,” Walters said in a statement released last week.
Bill Banfield, EVP of Capital Markets, sat down to talk with The Mortgage Note about how these programs work.
“What we are trying are pilot programs in certain areas to help people get on that homeownership ladder to achieve generational wealth,” Banfield said.
Banfield said these programs are unique because they offer assistance with a down payment, which is often the largest hurdle to homeownership.
“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. “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.”
Banfield said in underserved markets where inventory is low and competition is tough, these programs can give buyers confidence when making an offer on a home.
“You can have all the fancy programs you want, but you need to be able to deliver on being able to get the loan closed so we have spent a lot of time focused on things like our verified approval letter so with all of these programs, it doesn’t matter which one it is, we will do a full-blown approval with your income, your assets, your employment, credit scores, so when you go to make an offer, you know you’re good to go,” Banfield said.
Applications submitted by 5 p.m. are underwritten that night. The average approval takes three hours, Banfield said.
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