UWM launches affordability products

Pair of products help with down payment, closing costs

UWM launches affordability products

United Wholesale Mortgage has introduced two more home affordability products designed to help underserved borrowers achieve homeownership, officials have announced.

Mortgage Professional America reached out to Alex Elezaj (pictured), UWM’s chief strategy officer, for more details. He expounded on the new products – the Special Purpose Credit Programs (SPCP) for HomeReady® and Freddie Mac’s BorrowSmartSM Geo-Target. He noted the offerings will be available in select areas including Detroit, Baltimore and Chicago for Freddie Mac’s BorrowSmartSM and Detroit, Baltimore, Chicago, Atlanta, Memphis and Philadelphia for HomeReady® SPCP.

Qualified buyers will receive up to $10,000 toward their down payment/closing costs with the Freddie Mac BorrowSmartSM Geo-Target Assistance program, or they will receive $5,000 toward their down payment/closing costs and up to $1,000 toward home warranty/appraisal costs with HomeReady® SPCP, he said.

“We did a couple of other great products for home affordability earlier this year,” he said during a telephone interview. “We’re committed to help make homeownership more affordable across the country. That’s what the main driver is – how we can help across the board. We view these home affordability products as a win-win and it really helps separate independent mortgage brokers by giving them additional products to win in this kind of environment.”

Those in certain markets stand to benefit

He described the benefits of the HomeReady product: “It’s really exciting,” he said. “Basically, for the metro areas of Baltimore, Detroit, Chicago, Memphis, Atlanta and Philly, they can receive up to $5,000 for their down payment and closing costs and $1,000 for home warranty and appraisal costs. It’s a really big deal for people.”

Additionally, qualified buyers will receive up to $10,000 toward their down payment/closing costs with the Freddie Mac BorrowSmart,Geo-Target Assistance program, he said, or they will receive $5,000 toward their down payment/closing costs and up to $1,000 toward home warranty/appraisal costs with HomeReady® SPCP.

Additional details on specific qualifications can be found on the product details page, located here.

This announcement follows the expansion of UWM’s Bank Statement loan options which provide additional flexibility for independent mortgage brokers and their self-employed borrowers, Elezaj said.

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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