Guild Mortgage is the latest traditional home loan provider to get into the cash offer business, with a new program that’s aimed at helping homebuyers in 11 states compete with investors and other buyers paying cash for homes.
For now, the Guild Mortgage CashPass program is only available in Arizona, California, Colorado, Massachusetts, Missouri, Nevada, Oregon, Pennsylvania, South Carolina, Texas and Washington, but more states are coming online soon, the company said.
“With less inventory, sellers are getting multiple strong offers and we want to help our clients compete and win,” said Guild Mortgage CEO Mary Ann McGarry, in a statement.
Last year, regional independent mortgage bank Evergreen Home Loans showed that any mortgage lender can develop its own cash offer product. After launching in Washington state last year, the CashUp by Evergreen program has since expanded into Arizona, California, Colorado, Idaho, Nevada and Oregon.
Qualifying homebuyers, who are preapproved for Guild Mortgage’s CashPass program, get a certificate that their real estate agents can use to make an all-cash offer with no appraisal or financing contingencies. The CashPass offer is contingent on a home inspection to verify safety and livability.
Guild Mortgage will pay cash for the property if the homebuyer’s permanent financing is still being processed when the sale is finalized. Homebuyers can move in as soon as it’s purchased by Guild Mortgage using a rental agreement. Guild Mortgage also offers a bridge loan for homebuyers who want to access their current home’s equity for a down payment.
The CashPass program is available for primary residences, second homes or investment properties, with down payments depending on occupancy.
Homebuyers need a credit score of at least 680 and must pay a program participation fee of $1,350, that’s deposited to escrow with their earnest money deposit of 2 percent. Guild Mortgage keeps the CashPass participation fee and the earnest money deposit if homebuyers end up using another lender for their permanent financing.
Founded in 1960 and headquartered in San Diego, Guild Mortgage employs more than 4,500 people at 260 retail branches serving 42 states, providing conventional, FHA, VA and USDA mortgages, down payment assistance programs and other specialized loan programs.
In its most recent quarterly earnings report, parent company Guild Holdings reported originating $6.1 billion in mortgages during the three months ending March 31, down 31 percent from the previous quarter and 37.5 percent from a year ago.
With rising mortgage rates cutting into its refinancing business, Guild said purchase loans accounted for 65.7 percent of total originations, up from 37 percent a year ago.