This option gives homebuyers access to a 3% grant on FHA, VA, or USDA government loans, which will lower a borrower’s downpayment to 0.5% from their own funds. The program is only available on Texas properties, except in the cities of El Paso, Grand Prairie and McKinney.
“This is a great program for mortgage brokers to help clients purchase a more affordable home and expand their business,” commented Mark Greco, president of 360 Mortgage.
The chief operating officer of 360 Mortgage, Andrew WeissMalik, explained in an interview other lenders can originate SETH Option 3 loans, but they must sell them to his company. There are other parts to SETH, including Option 1 and Options 2A and 2B; those are serviced by U.S. Bank and they can only be done on a retail basis, not mortgage brokers.
Now, the Option 3 program is open to mortgage brokers across Texas. These brokers can work with the wholesale channel at other lenders as well as 360 Mortgage’s own wholesale channel.
Other terms of the SETH program include the home purchase price cannot exceed $250,200, a minimum credit score of 600 (other options it is 640) and a debt-to-income ratio which is not above 45%. WeissMalik added that unlike the other options, the downpayment assistance can be used for rate and term refinancings.
While SETH sets the guidelines, 360 Mortgage makes suggestions because the company has to have a level of comfort, he said.
“Excluding the mortgage broker community just does harm to a Texas resident,” he continued, adding that SETH-Option 3 gives those originators access to DPA programs where right now they don’t have any.
Lenders approve the brokers, and 360 Mortgage approves the lender. Neither the lender or broker has to be domiciled in Texas, just licensed there; the property can be anywhere in Texas except the three cities listed above.
Allowing brokers to do Option 3 evens the playing field when competing against lenders, and is another sign the company supports and looks to revitalize this channel, he declared.