He addressed the limited metro areas for which the products will be available: “We’re working with a partnership with HomeReady,” he stressed. “It’s a matter of these are the cities where home affordability is needed more – it’s probably the best way to put it. These are specific areas where it’s like, ‘hey, these metro areas like Baltimore or Chicago are areas that have a lot of opportunities to make a big impact on those communities’.”
He described the benefits of the BorrowSmart program: “Same kind of thing where it’s geo-targeted to Detroit, Baltimore and Chicago, so you can have an idea of the cities – there’s some overlap. These borrowers receive up to $10,000 toward their down payment and closing costs, so another huge win for people who can take advantage of that.”
It’s for the borrowers
The products emerge at a time when the housing industry is tightened, with scarce housing stock against an inflationary backdrop marked by higher mortgage rates. But Elezaj insisted the programs were designed to help would-be homeowners more than brokers seeking market share gains in a tightened environment.
“I would say these are not needle movers for us,” he said “It doesn’t really drive from a revenue perspective but it’s the right thing to do, just like we did with the 1% down. I believe it helps brokers to have extra products helping consumers in the areas they live in – when a broker, in their community, is to be able to satisfy and help out the borrower who needs affordable products the most. Giving this opportunity to help these borrowers with down payment assistance is another great look, but from an overall big picture it’s not like we’re driving a bunch of business but doing the right thing and helping borrowers.”
UWM in April launched its “Conventional 1% Down” offering designed to entice borrowers seeking affordability by providing a further 2% grant for a total package of up to $4,000 toward a down payment for a home. The product garnered some criticism centered around the total offered that some suggested may not be of much help. Moreover, critics say the program’s requirements – available for homebuyers who have an income at or below 80% of the Area Median Income (AMI) and a 97% LTV – has potential to reduce the pool of eligible applicants even more, something UWM suggests is not accurate.
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