Freddie Mac is rolling out a free tool for lenders, DPA One, that matches borrowers with down payment assistance programs across the country. DPA One streamlines the available state programs into a single source that lenders can use to find and compare programs for their borrowers.
“Time and again, research reveals that the down payment is the single largest hurdle first-time homebuyers need to overcome to attain homeownership,” said Sonu Mittal, senior vice president of acquisitions at Freddie Mac. “But finding and comparing the many programs and their guidelines is challenging.”
Down payment assistance is offered through state finance agencies as well as local and municipal sources, which makes it difficult for lenders and borrowers to access the available resources.
“DPA One delivers a one-stop shop at no cost that brings lenders and their borrowers greater detail and visibility into these programs, while seamlessly connecting the right assistance program with the lender, housing counselors and borrowers who need this assistance the most,” Mittal said.
The new tool allows lenders and housing counselors to enter client eligibility parameters, download results and compare up to three programs side by side to make quicker lending decisions. The single, standardized format enables state agencies to manage, edit and update their programs in real-time.
“DPA One will make it easier for mortgage lenders of all kinds to participate in HFA down payment assistance programs so they can more easily reach the underserved borrowers these programs were designed to help,” said Stockton Williams, executive director of the National Council of State Housing Agencies, in a press release from Freddie Mac.
DPA One currently covers down payment assistance programs for 48 of the 50 state housing finance agencies and has local and municipal programs for Texas and Minnesota. By the end of the year, DPA One will have local and municipal assistance programs for Florida, Virginia, California, and Kentucky and expects to bring the remaining local and state programs online throughout 2024.
Dan McMahon, home finance director with Colorado Housing and Finance Authority, said in the release: “DPA One is an exciting innovation that simplifies the intake process and offers lenders a standardized view of various down payment assistance programs across the state. This will ultimately help connect more homebuyers with the resources they need to achieve homeownership.”
The down payment assistance offered through state and local sources can be used by very low to low-income borrowers to reach the 3% down payment needed for Freddie Mac’s Home Possible mortgage. A number of lenders are offering low down programs or down payment assistance for first-time homebuyers, including Rocket, Guild, Guaranteed Rate, Zillow Home Loans, Wells Fargo and CrossCountry.