During the company's weekly sales meeting Wednesday, United Wholesale Mortgage President and CEO Mat Ishbia announced the end of its 1% down mortgage program.

Ishbia said that while he is proud of the work the program accomplished, it needed to come to an end.

“It’s been a great program, but we’ve decided to sunset this program at UWM,” Ishbia explained to HousingWire, saying no one is forcing the company to end its program, but it was something his team decided needed to happen.

He explained that while the company considered ending the program right away, he opted to keep it going through the home buying season before ending it.

Back in July last year, Freddie Mac announced it was ending lenders’ 1% down mortgage program, as many lenders were simply pricing the remaining 2% into the price of the loan, rather than giving the money to homebuyers as a grant. Lenders would then originate their buyer’s mortgage using Freddie Mac’s 3% down mortgage program.

But then, Freddie Mac said no more.

At this point, many lenders were forced to discontinue their programs.

For example, Quicken Loans Executive Vice President Bill Banfield said that Quicken wasn’t done innovating. The company doesn't have anything planned yet to fill the hole but remained excited about the future thanks to its other mortgage offerings, such as Rocket Mortgage, the company's online digital mortgage.

However, UWM said it would continue to offer 1% down to its brokers, making up the remaining 2% through grants, which it did not price into the loan.

After Freddie canceled the program, Ishbia explained, “If the loan on a 3% down is at the exact same place and fees as the 1% down, there should be no problem offering them, but my understanding is that’s not how all lenders are doing the program.”

But now, Ishbia said he is now choosing to end UWM’s 1% down program. He said this change will go into effect for all applications submitted after May 31, 2018. While brokers can still close up until the end of August, no new applications will be accepted after the May 31 deadline.

Because UWM gave the money as a grant, and did not add it in to the price of the mortgage, Ishbia explained the company was losing money on every loan. “We couldn’t keep the program going forever,” he said. “I don’t have unlimited funds.

Ishbia said while this program is reaching its end, he hopes to replace it with a new initiative soon.

Until this point, Ishbia said the company gave a total of $40 million in grants through its 1% down program, helping more than 10,000 homebuyers get into a home. Ishbia said he feels really good about the work the program did to help homebuyers and brokers.

[Editor's note: This story originally published two hours early and was temporarily suspended. We apologize for the delay.]

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