As we move into a purchase-centric housing market and Millennials decide it’s time to move into their own homes, affordable housing tools to increase referral business rise to the top of industry conversations.

Becoming a subject matter expert in your own market on the options and resources available to homebuyers in the affordable housing marketplace will differentiate you among your peers, create referral sources and build a platform for long-term success. The value of affordable lending products comes not just from serving the mission to drive homeownership, but also from the benefit of cultivating a network of purchase referrals.

As Rob Chrane, CEO of Down Payment Resource®, pointed out in a January 2018 article, “The world needs real estate agent and mortgage loan officer ‘teachers’ more than ever. Those who take the time to learn the full range of options then patiently explain them to borrowers will be rewarded with more commissions, referrals and the satisfaction that comes from helping people become successful homeowners.”

Inventory constraints aside, 2 of the top obstacles for potential homebuyers continue to be down payment and access to credit.

By offering solutions to overcome this common problem, many industry professionals have built a network of referral sources that rides out rate and market trends without fail. For lenders, supporting affordable lending is the hub of the purchase wheel. The network of professionals who understand and cultivate affordable housing products offers a unique business platform.

Josette Alexander, Sales Manager and Builder Specialist, at Flagstar Bank, has built such a network.

“First-time homebuyers are special. Confusion, wonder and vulnerability are some of the positive traits that first-time homebuyers exhibit throughout the loan process,” she said.

These very traits that may frustrate or exhaust mortgage industry professionals are what experienced loan officers embrace and run toward. And, first time homebuyers who receive the guidance and attention they require are exceedingly loyal.

“Time spent with a first-time homebuyer at the infancy of the loan, throughout and up to the closing is rewarding,” said Alexander. “These relationships will foster lifelong customers and healthy referral partners, through sharing their experience with family and friends.”

However, working with first time homebuyers will mean differences in loan amounts and types. “Understandably, first-time homebuyers’ loan amounts, even in the Bay Area, tend to be lower than 1 jumbo loan client so you may need to do 2, possibly 3 originations to equal 1 jumbo transaction,” said Alexander.

That loyalty in long-term clients that you nurture will result in increased retention and additional referrals that can maintain and become a lifelong customer list and pipeline.

Amazingly, statistics show that only 23% of FTHBs are familiar with down payment assistance programs. And almost 30% of homebuyers still believe they need a 20% down payment.

“While interest rates and home prices climb, the need for affordable housing programs will increase,” said Joshua G. Smith, Bond Programs Manager, Guild Mortgage. “By offering over 500 programs nationwide, this helps us pave a path of opportunity for new referral partners. Affordable housing programs will continue to be critical for helping borrowers who are qualified, but may not have the down payment needed to buy a home. Being able to assist a realtor or borrower when no else could creates a referral partner for life.”

Many potential homebuyers are unaware owning a home may be a better option for the short and long-term. How can you help them?

  • Use the MGIC Buy Now vs. Wait Calculator to clearly illustrate the potential of homeownership for your homebuyers
  • Or tap into the potential in your market by taking advantage of tools such as the Urban Institute’s interactive access and affordability map that can help homebuyers, policymakers and community leaders better understand their state’s challenges and available tools by providing a comprehensive view of 16 housing market factors users can compare among states

Market knowledge is critical in today’s competitive housing market. Affordable lending solutions augment the value you bring to your professional partners and consumers. Mortgage originators adept at affordable housing products build tight relationships with real estate agents, communities, referral partners and especially with their borrowers.

Knowing products through HomeReady®, Home Possible® and the HFAs opens avenues for production to help your borrowers realize they can both qualify for and afford homeownership. Don’t wait to hone in on the long-term potential of affordable housing products – start building your network and your knowledge base today.

For additional resources to help you stay up-to-date on the latest loan officer trends in the mortgage industry, check out our mortgage industry tools.

Down Payment Resource® is a registered trademark of Workforce Resource LLC. HomeReady® is a registered trademark of Fannie Mae. Home Possible® is a registered service mark of Freddie Mac.

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Harper Wong

Harper Wong - Director, Community Lending Solutions at MGIC

Harper Wong has been in the lending industry since 1991 and joined MGIC in 1998. As Director - Community Lending Solutions, Harper is focused on affordable housing and supporting diverse trade groups. Based in Northern California, Harper has spent over twenty years focused on cultivating sustainable homeownership and educating lenders, originators and industry partners regarding low down payment options.

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