On the heels of our first-ever Agent Appreciation month, Inman is leaping into February with our Residential Finance theme month. Join us as we investigate how buying and selling a home is changing, from companies backing consumers in new ways to integrated services that handle the entire transaction.
Millions of renters are mortgage-ready, but may not have what they need for a down payment. A new tool for loan officers to connect homebuyers to down payment assistance programs in their area may help.
The tool, Down Payment Connect, is the result of a partnership between national private mortgage insurance company Mortgage Guaranty Insurance Corporation (MGIC) and Down Payment Resource (DPR), provider of a nationwide database of down payment assistance and affordable lending programs.
“For more than 60 years, MGIC has helped families achieve homeownership sooner by making affordable low-down payment mortgages a reality,” said Margaret Crowley, MGIC’s vice president of marketing and customer experience, in a statement.
“Through Down Payment Connect, our customers now have access to hundreds of down payment programs in a single database to help them grow their customer base and, most importantly, put more families in homes.”
Down Payment Connect allows loan officers “to help eligible homebuyers quickly identify assistance programs and boost the affordability of their mortgage,” according to a press release.
DPR did a “soft launch” of the tool in October before Tuesday’s national rollout, Down Payment Resource spokesperson Tracey Shell told Inman in a phone interview.
Down Payment Resource also offers a similar tool for real estate agents for $24 per state per month or $240 annually. That’s up from $19.95 per month a couple of years ago. Agents whose multiple listing service partners with Down Payment Resource receive Down Payment Connect at no additional cost.
“We know the challenge of saving for the down payment is the number one hurdle for first-time homebuyers and many buyers don’t know to ask about this type of help. Now more than ever, it’s important for buyers to understand and evaluate homeownership programs that may help them buy a home sooner,” said Rob Chrane, CEO of Down Payment Resource, in a statement.
Down Payment Connect provides subscribing loan officers with a unique landing page they can co-brand and add to their own website, email signature, newsletter or marketing campaign, Shell said.
The landing page allows potential buyers to search through DPR’s database of more than 2,400 down payment assistance programs to find those they are eligible for in their area. To see their search results, buyers must first enter their contact information, which is then provided exclusively to the loan officer as a lead.
“It’s a warm lead. They know that that buyer is interested in exploring these options and gives them more information about [the buyer’s] situation,” Shell said.
While anyone — buyers, lenders, agents — can go to DPR’s website, conduct a search and get results for free, Down Payment Connect offers leads as well as what Shell described as “an integrated approach” where the loan officer is able to have his or her tools in one place.
Down Payment Resource also hopes the tool will foster conversations between loan officers and buyers — or in the case of the agent tool, agents and buyers — to discuss down payment assistance from the very beginning.
“For a lot of people, the awareness of down payment assistance is so low, so hopefully this is going to expand that awareness,” Shell said.
Down Payment Connect also offers loan officers some features not available to agents and buyers, including a directory of available down payment assistance programs in subscribed states, access to detailed program guidelines, the ability to limit the programs a buyer sees to those the lender participates in, an eligibility lookup tool to match clients with programs, and the ability to compare up to four programs at once.
Once a buyer chooses a program, who actually does the work of applying depends on the program, but the lender can provide guidance, Shell said.
Down Payment Connect can help lenders make more strategic marketing decisions, according to the companies. The tool may help lenders reach the growing first-time homebuyer market or convince them to participate in a program they hadn’t heard of before, Shell said.
The tool may also help lenders meet Community Reinvestment Act (CRA) goals, which require lenders to serve certain low- to moderate-income markets, she added.
MGIC will help DPR market Down Payment Connect to loan officers, both their own customer base as well as reaching out to others via digital ads, according to Shell. MGIC is also providing a training module for subscribers to provide social media content marketing strategies, she added.
“That’s frankly one of the biggest questions that we were getting is ‘how do we use this effectively with social media?'” she said.
In 2015, Down Payment Resource partnered with Bank of America to provide a tool that helps its loan officers and homebuyers identify down payment assistance programs borrowers might qualify for.
But Shell said DPR is not currently working with BofA and that partnership was for an early version of DPR’s consumer portal, one of its enterprise products for lenders that want to give all of their loan officers a particular tool, such as the program directory.