COVID-19 DPA Program Updates and Trends
October 2, 2020
The Down Payment Resource research team is closely monitoring the impact on down payment assistance (DPA) programs and first-time homebuyers as a result of COVID-19. We are committed to keeping you informed about the latest updates and trends through regular email updates. You can see today's highlights below and all updates on our new resource page.
COVID-19 DPA Program Updates
October 2, 2020 Updates
Local DPA Providers Stuck with FHA?
Our team has been hearing desire from local (municipal/non-profit) DPA providers to expand 1st mortgage product access beyond FHA 1st mortgages. Long story short, there is a clear need among these local DPA providers for education about HomePossible, HomeOne and HomeReady.
As many city, county and non-profit programs experience surges in volume (as we’re seeing with housing finance agencies), they feel hamstrung by a reliance on FHA mortgages. While their programs need to be vetted by lenders for Fannie or Freddie community second eligibility, the bigger issue is that these providers don’t know about 3% down Conventional mortgages.
We’ve been providing them with the GSE 2nd checklists so they can see how their programs fit in, and discussing options like calling on local lenders to ask them to participate and offer conventional 3% down financing.
What’s the upside? These DPA providers are pleading for a wider array of mortgage options and have the funds to help buyers with DPA, but they need lenders who will participate, take their buyers, and offer more 1st mortgage options.
Lenders, call your city, county and non-profit DPA providers and see where you can help. There’s business waiting for you!
Product Teams, review your approved DPAs and call on them to see if your 1st mortgage options can help them expand their reach. Check out a few more local programs you haven’t reviewed and launch them!
Lastly, think about this from a qualification perspective. Conventional 1st + DPA = lower loan amount, better MI rates, no UFMIP. That borrower will refer their peers to you!
New DPA Programs
Even amidst COVID, new homebuyer programs are launching and others continue to expand their eligible audience. We’ve see “hero” definitions widened this year, which is a wonderful trend. Here are a few recent examples:
RIHousing Launches 10kDPA
RIHousing launched their new 10kDPA program offering a deferred 0% interest second for $10,000 in down payment assistance. See the RIHousing 10kDPA flyer for more details.
Minimum FICO is 660 and 10kDPA can be used for 1-4 family homes and condos with friendly income and purchase price limits. Nice!
Virginia Housing Community Heroes Program Expands
Virginia Housing teamed up with FHLB of Atlanta to provide the Community Heroes Program to teachers, fire fighters, and law enforcement professionals. The program provides up to an $8,000 grant for down payment assistance between Virginia Housing and FHLB Atlanta.
They recently announced they have expanded the eligible audience for the Community Heroes Program to include all public school employees and health care workers who provide medical care. Well done!
See the Virginia Housing flyer and learn more from FHLB Atlanta HERE.
Questions or feedback
If you have any questions or feedback related to these updates and our COVID-19 DPA resource page, please contact us at info@DownPaymentResource.com.