David Marshall

As much as any time in recent memory, the mortgage industry, as we’ve known it, has experienced significant changes: guidelines have been amended, documentation requirements have increased, MI companies have expanded their influence on approvals, FHA has integrated adjustments to upfront & annual MI premiums, based on LTV and credit scores, and Fannie Mae & Freddie Mac have instituted price adjustments, also affected by LTV and credit scores.

My managing broker has said countless times this year – jokingly or not – that we’re working 3 times as hard to close the same number of loans just two years ago. The sub-prime market has vanished, for better or worse, and most of the 100% conventional financing programs no longer exist. Sounds like the death knell for the mortgage industry, right? Not so fast – as an FHA-approved broker for the past 8 years, we’re strategically positioned to make homeowners out of renters, even in today’s struggling economy.

Recently, we uncovered a little-known government program, sponsored by USDA, to assist low- to moderate-income families finance homes at 100% of the sales price – in select areas. Note: this is NOT a bond program, it is NOT affiliated with down-payment assistance programs (which are slated to be eliminated October 1st), and there are NO ADDITIONAL COSTS to the seller.

This is straight 100% financing with no MI to the buyer. Further, the seller may pay up to 6% of the sales price towards closing costs and pre-paid charges. Plus, if the property appraises for more than the sales price, closing costs may be financed into the mortgage. For the right buyer, and the right home, this is a tremendous product to take advantage of!

Amazingly enough, over the past month, we’ve encountered resistance: THE LISTING AGENTS AREN’T INTERESTED IN THE PROGRAM! Now, in some cases, they'll allow a brief conversation regarding one of their eligible properties, but more often than not, they won’t make the time to listen. Incredible!

What can we do to get more people excited about this program? Why the hesitation?

Credit to Jeff Anderson for program research.