Guest Post: Why We Appreciate the High-Touch Help HFAs Can Offer

This post originally appeared on Fannie Mae’s Housing Industry Forum.

By Mary Ann McGarry

Homeownership is a dream that is out of reach for millions of Americans, with only 63.4 percent owning their homes, the lowest level in 30 years, according to the Census Bureau.

Even as home sales have increased with interest rates near historic lows, first-time homebuyers are playing a relatively small part in the market. Along with tight lending standards, rising home prices – especially at the low end of the market – are shutting out many buyers.

But, as a lender, I would point out that first-time homebuyers struggling to purchase have options. Among the most attractive are housing finance agencies (HFAs) – housing authorities established to help meet the needs of the residents of individual states, counties, and cities through a wide range of affordable housing and community development programs.

HFA programs provide access to low-down-payment options. And through required education and counseling, they also help first-time borrowers understand the responsibilities of homeownership.

Homebuyer education and counseling services must conform to National Industry Standards for Homeownership Education and Counseling guidelines, which mandate education in several areas:

• Homeownership readiness.
• Budgeting and credit.
• Financing a home.
• Shopping for a home.
• Maintaining a home and finances.

The Case for Homeownership Education

HFAs feel so strongly about pre-purchase education that they consider it a prerequisite for access to other programs and benefits, including the following:

• Down-payment assistance programs.
• Free grants up to $25,000 or more.
• Closing-cost assistance.
• Below-market mortgage rates.
• Second mortgage loan forgiveness.

HFA programs – together with pre-purchase counseling – strengthen communities and ensure access to homeownership. Many HFAs tailor their programs for first-time homebuyers to specific occupations such as teachers, police, or fire fighters.

Without assistance, many of these professionals are unable to live in the communities where they work, because housing prices are out of reach or they do not have access to favorable financing terms.

HFA programs also help lenders manage credit risk at the local level. These local agencies – which understand they are placing their own funds at risk – are most effective at considering local conditions and dynamics.

Many lenders choose not to operate in this market because adhering to city, county, and state HFA program guidelines increases the complexity of processing HFA loans.

However, given Guild’s tradition of providing financing to first-time homeowners since 1960, and its commitment to helping them, we have emerged as a leader in making homeownership a possibility for first-time homebuyers.

Guild’s commitment to HFA partnerships has resulted in a high percentage of purchase loans in its portfolio. And it sets Guild apart as a purpose-driven lender focused on serving first-time borrowers.

Consistent with its customer-centric approach to lending, Guild is proud to provide a high-touch and supportive experience for thousands of first-time homebuyers who have funding through HFAs.

Guild acts as the lead coordinator and liaison with real estate agents, buyers, and sellers to help all parties in a loan closing – with special expertise in serving first-time homebuyers.

With Guild, first-time homebuyers can expect guidance and support, making what can be a complicated and challenging experience a little easier.

Mary Ann McGarry is CEO of Guild Mortgage Company, an Equal Housing Lender, NMLS #3274.