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Yahoo
a day ago
- Business
- Yahoo
Want to use crypto to get a mortgage? It may get a lot easier.
Those who want to use crypto assets to help buy a home could potentially get the opportunity to do so. Bill Pulte, the overseer of Freddie Mac and Fannie Mae, has ordered the agencies to consider letting potential borrowers use cryptocurrency as an asset for reserves when they do risk assessments for single-family home loans. Guaranteed Rate executive vice president of national sales Jennifer Beeston explains what this move could mean for both potential homebuyers and the mortgage industry. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. right now, you can use crypto when you're buying a house, but it has to be liquidated. So for down payment, it has to be liquidated. For reserves, it has to be liquidated. What Culti has called for, and this isn't effective yet, but he's called for Fanny and Freddie to look at how they can use it as reserves without liquidating it, which is critical, because every crypto person I know never wants to liquidate it. Jennifer, I'm just curious though why traditionally, and you've been in the business a long time, would crypto have been excluded from underwriting frameworks? I mean traditionally, was it because folks thought, listen, it's it's too volatile, there's not enough regulation? What were the reasons? I think that the mortgage industry often moves slower. I also think that in the grand banking sphere, there were quite a few naysayers against crypto, saying it wasn't real money and it was a fad. But as we've seen with BlackRock doing a crypto ETF, Chase is now looking at using Bitcoin ETFs as collateral on loans. The sentiments really changed, and I think that's what's driving this, as well as the president coming out and saying he wants the United States to be the crypto capital of the world. Do you, the actual effects of this, Jennifer, you know, let's say it happens, would you imagine, okay, there's going to be just that many more potential hopeful American home buyers who are going to be able to qualify for a loan? Yeah, I think we're removing more barriers. You know, in terms of reserves, a lot of people don't understand that in situations like, let's say, it's an owner-occupied loan. Sometimes if you have a higher debt income or something's not quite right, more reserves can help get that loan approved. I can have a borrower right now that has $100,000 in crypto, and unless they liquidate that, I can't use that to strengthen them. So Fanny and Freddie looking at a way to do that, it will help people. Do you think, Jennifer, let's say the price of cryptocurrency falls, would that mean a lender would go back to the borrower and say, hey, you know, you got to put up additional collateral here? Uh, I mean it depends. If the loan has not closed yet, yeah, we would be paying attention to that theoretically. But we still don't know what the guidelines and guard rails on this are going to be. Are they going to treat all crypto coins the same, or is it going to be something like only the, you know, Bitcoin, Ethereum, Ripple? You know, I think Trump said there were about five that he was looking at the United States investing in. Is that what they're going to be tying it to? We don't know what the rules are going to be yet, so it's hard to understand the risk. And that's what they're studying is how to do this in a safe manner and still help people get into homes. One question I've heard asked, Jennifer, I'm curious to get your take on this. I've heard some people ask you, you have this sort of established mortgage system and how tough it would be to integrate crypto into that, just tactically and operationally. What do you say to that? I think that what they're talking about right now is more just underwriting. So I don't think that's difficult because it's just going to be, uh, we saw this with restricted stock income. We saw a lot of that in the tech sphere. It's just the way we look at it. Now, if for instance, you started seeing that down payments, instead of being liquidated from crypto, people were expecting to have that go from the exchange straight to escrow. Yes, that would be a change. However, there's companies in that space lining up to do that. So I think tech is moving so fast right now. This isn't the mortgage companies of years back. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Yahoo
a day ago
- Business
- Yahoo
Want to use crypto to get a mortgage? It may get a lot easier.
Those who want to use crypto assets to help buy a home could potentially get the opportunity to do so. Bill Pulte, the overseer of Freddie Mac and Fannie Mae, has ordered the agencies to consider letting potential borrowers use cryptocurrency as an asset for reserves when they do risk assessments for single-family home loans. Guaranteed Rate executive vice president of national sales Jennifer Beeston explains what this move could mean for both potential homebuyers and the mortgage industry. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-05-2025
- Business
- Yahoo
Down payments are the biggest homeownership hurdle. Why is Washington making them scarcer?
The cost of housing in America is so high that many Americans despair of ever owning a home. There's near-universal agreement among housing observers that the primary barrier to ownership, for most people, is the down payment. And in recent years, the cost of renting has become so onerous that nearly two-thirds of renters live with negative cash flow, rendering it nearly impossible to save to buy a home. That's why many in the real estate space are disappointed in the decision by a Washington regulator to end support for some programs that helped many Americans over that hurdle and into a position to buy homes. 'Special Purpose Credit Programs,' or SPCPs, are targeted lending products designed to specifically benefit some groups of Americans who have historically been denied credit due to discrimination. On March 25, Bill Pulte, the new director of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, terminated the involvement of the two government-sponsored enterprises in such programs. 'It's a real blow toward some of the progress we had seen in efforts to improve homeownership, especially for those who historically have been excluded,' said John Walsh, a researcher at the Urban Institute's Housing Finance Policy Center, about the move. 'Between the tightness in the mortgage market and the lack of housing supply, first-time homebuyers are struggling overall,' Walsh said. 'There's a real need for that boost to get people over the hump, into homeownership.' The Federal Housing Finance Agency did not respond to multiple requests for comment from USA TODAY. Fannie and Freddie don't make loans. They support the housing market by buying mortgages from banks and other financial institutions, taking them off their books so lenders can then make additional loans. More: Fannie and Freddie will back homes costing nearly $1 million as prices surge SPCPs are programs developed by such lenders to encourage ownership among the communities Walsh mentioned. Fannie and Freddie began to buy the loans in 2023, and nearly 15,000 households were able to achieve homeownership as a result. An April letter from 18 members of Congress urging the regulator to reverse the March decision explained: 'In 2023 alone, Fannie Mae acquired 921 loans through its HomeReady First SPCP program, delivering more than $5 million in down payment or closing cost assistance and acquired an additional 4,747 loans through lender-sponsored SPCPs. Freddie Mac supported an additional 9,300 households through similar programs last year.' As one example, the lender formerly known as Guaranteed Rate had a program that provided up to $8,000 in assistance to underserved potential homebuyers. It was meant to cover such barriers as deposit minimums and move-in repair and maintenance costs. The company did not respond to a USA TODAY query about whether the program would continue without support from Fannie and Freddie. AnnieMac Home Mortgage, a national lender with headquarters in New Jersey, had two programs, Home Start and Borrower Smart Access, that worked in conjunction with municipal housing finance agencies, with the agency contributing a certain amount toward the down payment, and the lender another portion. Craig Ungaro, AnnieMac's COO, said the company sensed a 'landscape change' that had happened in November as a result of the election, and decided to halt the programs when they were due to expire in April. The programs were designed to help borrowers who would otherwise have trouble making the down payment and covering closing costs, he said. 'There are definitely segments of the population that don't have as much of a grip on that or access to that, so they gave us a way into getting into those markets and reaching those consumers.' NeighborWorks America is a national nonprofit that creates opportunities for people to live in affordable homes, most notably with the help of homeownership counseling services., 'Things are very tough right now,' the group's president and CEO, Marietta Rodriguez, said in a March interview with USA TODAY. 'You have rising insurance costs. You have rising taxes. And then you have general inflation and the economy. You feel like you're swimming upstream and so I completely understand how people are just opting out, like 'homeownership is not attainable for me'.' Still, Rodriguez said, owning a home connects Americans to their communities in a way that renting doesn't. 'So it's the responsibility of all of us to make sure that those opportunities are open (to) someone who wants to achieve it,' she said. Many Americans may 'take themselves out of the market' without realizing that there are many programs and systems in place to help them, she pointed out. Indeed, there are over 2,500 down payment assistance programs across the country, an increase from late last year, according to the Q1 report from Atlanta-based Down Payment Resource. Some programs support the purchase of manufactured housing, multifamily housing, first-generation homebuyers, and more. There is even special funding to surviving military spouses. Counseling services provided by NeighborWorks help Americans in all corners of the country, from Texas to Connecticut, as previously reported. But many housing observers think the SPCP programs were special. The borrowers who used them might otherwise have used FHA mortgages, which have some downsides, including a more stringent mortgage insurance requirement for borrowers who make down payments of less than 20%. They are also frequently more time-consuming to process, and as a result, can be viewed less favorably by home sellers than bids that have other types of mortgages, like those backed by Fannie and Freddie. "In the eyes of the seller and the selling agent and the people in the real estate community, (a non-FHA loan) is a better offer," Ungaro said. "FHA is a good backup," said Walsh, of the Urban Institute. "But I think for a lot of these borrowers what the SPCP programs were offering helped them get over that hump in a way that FHA couldn't." This article originally appeared on USA TODAY: Why is Washington reducing down payment assistance for home buyers? Sign in to access your portfolio
USA Today
01-05-2025
- Business
- USA Today
Down payments are the biggest homeownership hurdle. Why is Washington making them scarcer?
Down payments are the biggest homeownership hurdle. Why is Washington making them scarcer? Show Caption Hide Caption How much house can I afford? Here are some guidelines to know. In the market for a new house? Here's what to know about home affordability and costs. The cost of housing in America is so high that many Americans despair of ever owning a home. There's near-universal agreement among housing observers that the primary barrier to ownership, for most people, is the down payment. And in recent years, the cost of renting has become so onerous that nearly two thirds of renters live with negative cash flow, rendering it nearly impossible to save to buy a home. That's why many in the real estate space are disappointed in the decision by a Washington regulator to end support for some programs that helped many Americans over that hurdle and into a position to buy homes. 'Special Purpose Credit Programs' are targeted lending products designed to specifically benefit some groups of Americans who have historically been denied credit due to discrimination. On March 25, Bill Pulte, the new director of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, terminated the involvement of the two government-sponsored enterprises in such programs. 'It's a real blow towards some of the progress we had seen in efforts to improve homeownership, especially for those who historically have been excluded,' said John Walsh, a researcher at the Urban Institute's Housing Finance Policy Center, about the move. 'Between the tightness in the mortgage market and the lack of housing supply, first-time home buyers are struggling overall,' Walsh said. 'There's a real need for that boost to get people over the hump, into homeownership.' FHFA did not respond to multiple requests for comment from USA TODAY. Fannie, Freddie, and the SPCPs Fannie and Freddie don't make loans. They support the housing market by buying mortgages from banks and other financial institutions, taking them off their books so lenders can then make additional loans. More: Fannie and Freddie will back homes costing nearly $1 million as prices surge SPCPs are programs developed by such lenders to encourage ownership among the communities Walsh mentioned. Fannie and Freddie began to buy the loans in 2023, and nearly 15,000 households were able to achieve homeownership as a result. An April letter from 18 members of Congress urging the regulator to reverse the March decision explained: 'In 2023 alone, Fannie Mae acquired 921 loans through its HomeReady First SPCP program, delivering more than $5 million in down payment or closing cost assistance and acquired an additional 4,747 loans through lender-sponsored SPCPs. Freddie Mac supported an additional 9,300 households through similar programs last year.' As one example, the lender formerly known as Guaranteed Rate had a program that provided up to $8,000 in assistance to underserved potential homebuyers. It was meant to cover such barriers as deposit minimums and move-in repair and maintenance costs. The company did not respond to a USA TODAY query about whether the program would continue without support from Fannie and Freddie. AnnieMac Home Mortgage, a national lender with headquarters in New Jersey, had two programs, Home Start and Borrower Smart Access, that worked in conjunction with municipal housing finance agencies, with the agency contributing a certain amount toward the down payment, and the lender another portion. Craig Ungaro, AnnieMac's COO, said the company sensed a 'landscape change' that had happened in November as a result of the election, and decided to halt the programs when they were due to expire in April. The programs were designed to help borrowers who would otherwise have trouble making the down payment and covering closing costs, he said. 'There are definitely segments of the population that don't have as much of a grip on that or access to that, so they gave us a way into to getting into those markets and reaching those consumers.' The value of homeownership NeighborWorks America is a national nonprofit that creates opportunities for people to live in affordable homes, most notably with the help of homeownership counseling services., 'Things are very tough right now,' the group's president and CEO, Marietta Rodriguez, said in a March interview with USA TODAY. 'You have rising insurance costs. You have rising taxes. And then you have general inflation and the economy. You feel like you're swimming upstream and so I completely understand how people are just opting out, like 'homeownership is not attainable for me'.' Still, Rodriguez said, owning a home connects Americans to their communities in a way that renting doesn't. 'So it's the responsibility of all of us to make sure that those opportunities are open (to) someone who wants to achieve it,' she said. Many Americans may 'take themselves out of the market' without realizing that there are many programs and systems in place to help them, she pointed out. Indeed, there are over 2,500 down payment assistance programs across the country, an increase from late last year, according to the Q1 report from Atlanta-based Down Payment Resource. There are programs that support the purchase of manufactured housing, multi-family housing, first-generation homebuyers, and more. There is even special funding to surviving military spouses. Counseling services provided by NeighborWorks help Americans in all corners of the country, from Texas to Connecticut, as previously reported. But many housing observers think the SPCP programs were special. The borrowers who used them might otherwise have used FHA mortgages, which have some downsides, including a more stringent mortgage insurance requirement for borrowers who make down payments of less than 20%. They are also frequently more time-consuming to process, and as a result can be viewed less favorably by home sellers than bids that have other types of mortgages, like those backed by Fannie and Freddie. "In the eyes of the seller and the selling agent and the people in the real estate community (a non-FHA loan) is a better offer," Ungaro said. "FHA is a good backup," said Walsh, of the Urban Institute. "But I think for a lot of these borrowers what the SPCP programs were offering helped them get over that hump in a way that FHA couldn't."
