Housing inventory is tight, and the market in many communities around the country is hyper-competitive. That means mortgage originators need to know a range of ways to qualify their borrowers to ensure they are putting their clients in the best position to submit their offer.
Originators can’t just take the easy route. They can’t simply rely on the program
they’ve been selling for the last five years, because that’s not necessarily going to
ensure their borrower’s offer rises to the top in a bidding war for a home.
The most important thing is to present the cleanest, best loan program available.
And then wrap it in an offer that best positions a client’s bid to be accepted over any
The right fit
First-time homebuyers comprise nearly half of all housing purchases. Qualifying them
is not always easy. The key is meeting their needs with an option that eases challenges
around available savings for downpayment and closing costs.
Right now, in the purchase market, the government agencies are offering numerous low-downpayment loan programs. Originators need to educate themselves on
all these options, so they can provide the right program to their borrowers based
precisely on their specific financial needs.
Government programs offer a wide variety of loans, especially for first-time homebuyers and borrowers who may have limited funds available for a downpayment.
A Federal Housing Administration (FHA) loan, for example, requires a 3. 5 percent
downpayment, but that can be offset with downpayment-assistant programs, seller
concessions or other gifts.
Veterans, through Veterans Affairs loan programs, or those eligible for U.S. Department of Agriculture loans can borrow as much as 100 percent of the purchase price of a
home. In today’s market, borrowers also should also consider renovation loans, which
allow them to buy that ideal location and then upgrade the home. In such cases, they
are able to borrow against the “as improved,” or future worth, of the home — thereby
multiplying their purchasing power.
Government programs allow originators flexible options that can carry over through
the life of a borrower. A client purchasing a home may start with a government loan
such as an FHA, but then as the rate environment changes, an FHA streamline refinance might be a great option. Or, perhaps a borrower’s situation has changed, they’ve
built additional equity in their existing home, and they need a cash-out refinance.
In these cases, they will need a knowledgeable partner to guide them on selecting the
right loan program.
Navigating tight inventory
Housing inventory is extremely tight now, with far more buyers than properties. There
are a lot places in the country where builders can’t keep up with the number of orders
they are receiving. They just can’t build fast enough.
In almost all parts of the country, more buyers are moving toward manufactured
homes as an option. Manufactured homes are quick to deliver and relatively easy to
set up. They present a viable alternative to traditionally built homes.
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84 Scotsman Guide Residential Edition | ScotsmanGuide.com | July 2018
Laura Brandao is the chief operating officer at American Financial Resources (AFR),
a leading Federal Housing Administration (FHA) 203k lender for sponsored originations and
an innovator in one-time close loans. Brandao is the driving force that has catapulted AFR
Wholesale to the top of manufactured-home, one-time close and renovation lending in the
U.S. Brandao was nominated to Elite Women of Mortgage in 2014 and 2016. Reach her at