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NEW HOPE FOR FIRST-TIME HOMEBUYERS
A New Hope For First-Time Homebuyers
NEW FHA LIMITS AND DOWN-PAYMENT ASSISTANCE HELP BORROWERS GET INTO HOMES
Miki Adams is president of CBC Mortgage Agency.
By MIKI ADAMS, SPECIAL TO MORTGAGE WOMEN MAGAZINE
Few can deny that first-time homeownership is an uphill battle these days. Between higher home prices, low inventory, an uptick in mortgage rates, and rising inflation, it has become increasingly difficult for lower-income borrowers to find affordable homes and start generating homeownership wealth.
By raising loan limits for first-time homebuyers, the FHA has delivered some hope for potential borrowers in the new year. FHA loan limits are now $420,000 in most U.S. counties and as high as $970,000 in particularly expensive markets. The $420,000 limit applies to counties where 115% of the median home price is less than that amount.
The raised limits are especially welcome given the robust gains in housing prices nationally. But do the new FHA loan limits give would-be homebuyers enough optimism to keep their homeownership dreams alive, in spite of the obstacles in their way? It’s an important question because obstacles are growing larger by the day.
CONFRONTING CHALLENGES AND OBSTACLES
As inflationary pressures hit the country, one need look no further than the nation’s housing market as
a key indicator for the high cost of living. The most recent S&P CoreLogic Case-Schiller data found home prices continued their upward march across the U.S. in November, rising 18.8% annually — the sixth-highest reading in 34 years, according to Craig J. Lazzara, S&P DJI managing director.
Despite rising rates, low housing inventory will likely push home prices higher for the foreseeable future. In the past couple of years, investors and all-cash buyers have competitively bid up home values, making appraisals sometimes irrelevant to what buyers will actually pay. Even buyers who had been lucky enough to receive help from family members found steep competition from cash offers. Frequently, the amount of funds needed to meet minimum downpayment and closing-cost requirements, made it difficult for would-be homeowners to compete with cash offers.
First-time buyers face yet another challenge that makes homeownership less affordable. According to the National Association of Realtors, the median rent for 0–2-bedroom properties soared 19.3% between December 2020 and December 2021. By the end of the year, rents were increasing at six times the rate preCOVID. Increasing rents make saving for a down payment exceptionally difficult. Constant rent increases combined with rising home prices are crushing the aspirations of families.
But it’s not just families who are struggling. One of the emerging drivers behind today’s housing market are single women, who are increasingly looking at homeownership to build long-term wealth. In fact, according to recent Bank of America data, 65% of single women say they would rather buy a home before marriage, and nearly one-third of all current female homeowners actually purchased prior to tying the knot.
However, the bank also found that more millennials and Generation Z consumers aren’t planning to have kids, which has historically been one of the largest factors behind the decision to buy a home. And for many, the decision whether to first start a family or buy a home is irrelevant if they can’t afford either one.
REACHING OUT FOR RESOURCES
While the increase in FHA loan limits is encouraging, current conditions prove that assistance for first-time homebuyers has never been more important than it is today. Fortunately, help is available.
A number of down-payment assistance (DPA) programs offered through state housing finance agencies (HFAs) and other government and non-profit organizations can help cover a first-time buyer’s down payment and closing costs, which can range on average from 3% to as much as 7% or more depending on the agency. CBC Mortgage Agency, for example, offers down-payment assistance through its Chenoa Fund program. With it, buyers can get a forgivable or repayable second mortgage that covers up to 5% of the purchase price of the home.
DPA is a perfect complement to FHA loans. Some state housing agencies and employer-sponsored homebuyer programs offer freestanding down-payment and closingcost assistance. However, the vast majority of DPA programs are used in combination with a first mortgage originated through lenders already approved by a housing finance agency.
In most cases, DPA can be combined with other sources of assistance, such as qualified gift funds and grants. DPA programs are most commonly structured as either deferred payment second mortgages with zero interest (also known as “soft seconds”), fully amortizing second mortgages repayable with interest, or through grants.
The mechanism through which state housing agencies fund the DPA has evolved over time. Historically, assistance was enabled by federal funds distributed to qualified municipalities and nonprofits. Today, most DPA programs are funded by the gains achieved through selling and trading of mortgage-backed securities in the capital markets.
Of course, it’s one thing for first-time buyers to get financing for a home, but it’s even more important to keep it. Too many first-time buyers end up “house poor” because they poured all their savings into a down payment and are unable to absorb the unexpected costs of maintaining their home.
For this reason, CBC Mortgage Agency provides an 18-month-long post-purchase homeowner counseling program known as the Borrower Success Program. Through a collaborative relationship with a HUD-approved housing counseling agency, the educational program offers support and coaching for borrowers in transition to homeownership, and deals with everything from leaky faucets to financial stressors.
The bottom line is that FHA’s loan limit increase is welcome news. As it should, the agency rose to the occasion and new limits with programs to assist borrowers are giving new hope to firsttime homebuyers, an increasing number of whom are women. But for many, this move alone isn’t enough to overcome the impacts of rising home prices, inflation, and the likely increase in rates. That’s why DPA programs are so important, and why they need to be available for future generations of homebuyers. As long as that happens, the American Dream can survive, and homeownership will remain affordable and an attainable opportunity for all. n
Big Girls Do Cry
How many of you LOVED high school? And I mean really loved it.
If I had a time machine and I opened the door to let anyone jump in and go back to: • Braces and pimples; • Awkward kisses; • Homecoming dances to Salt-N-
Pepa’s “shoop shoop shoop”; • Pagers • 90210
But also: • Tears — lots of them! • Your first breakup; • Being grounded; • A friend stabbing you in the back.
When I was in high school, I was recruited by a college coach to play field hockey. She told my future teammates that the reason she made me her top priority as a recruit was because during my hometown visit I stepped on another girl’s head (an opponent) with my cleats and kept on running until I scored a goal. Nothing got in my way. I was as fierce as it came.
It wasn’t abnormal that during high school games I had to be stopped by a referee and told to not be as aggressive and that I needed to tone it down. I
Megan Marsh is owner of Keystone Alliance Mortgage
wasn’t like the other ladies out there on the field. “Stop playing so hard,” I was told.
When it was game time, I turned the intensity on and turned it up. I ran my competition over if they didn’t move. I had strength, mentally and physically. I was confident in myself, my skill, and my ability. I was prepared to conquer the world if the opportunity was put in front of me.
I was the captain of my D1 team, a natural leader because I didn’t fear a good challenge and I stood by what I believed in.
I imagine now that this was the reason my father was so concerned about me when I had my first breakup and breakdown. I was inconsolable! I don’t think I stopped crying for three days.
Now, none of you ladies can relate to this, can you?
It was unusual for my family to see me so vulnerable and upset. In an attempt to fix the situation my younger sister did what any loving little sister would do. With the hope of pulling on my ex-boyfriend’s heart strings, she called and read my ex-boyfriend’s entries from my journal!
It worked. We got back together a few days later. No more tears … for now.
I am the same way with everything I take on in life. At my business, I walk through the doors and I am all business. I’m focused, I’m sincere, and I’m determined to help people. I don’t have time to chit-chat at the water cooler. I don’t talk about people behind their backs and I can go to bed at night knowing, if I never wake up and I meet my God, that I have given
everything that I have for every person he has blessed me with serving.
But, I have learned through all the intensity and all the killer instincts that no matter how tough and intense I was, big girls do cry. I know this because when I finally entered the real world of people, adults, and business after graduating I quickly realized how difficult it was going to be to lead, to reach my goals, and stand up for what I wanted and believed in. It would be even more difficult if I didn’t learn how to control my emotions and face the mental warfare that so many of us get trapped in.
My athletic days and strong female coaches gave me the confidence and ability to believe I could do anything I put my mind to. The real world made me question everything and everyone because they did not have those same experiences of a team lifting them up, supporting them, and believing in them. As an athlete, particularly part of a team, I was taught to welcome someone better and faster than me with open arms and as an opportunity for us all to get better. The real world introduced me to some very different experiences that brought me to tears on a weekly basis. I have since learned that I am not the only one that has had the same experience.
Did you know: 41% of women have cried at work vs. 9% of men, which can be explained by a few factors: • Women have more prolactin.
Prolactin is a hormone produced by our bodies and one role it plays is emotional control. Women have 6x the prolactin in their systems compared to men. • Sociological influences. Women aren’t taught to suppress emotions from a young age like men are.
Therefore crying is a natural reaction to the emotions we feel.
However, with that being said, and science aside, being told you’re not eligible for a promotion or leadership role because you’re emotional is downright infuriating.
Hearing you are “too emotional” while watching less-seasoned male colleagues rise up the ranks due to their aggressive and argumentative behavior that is coined “assertive” quite literally drives women mad or straight out the door.
Being treated differently as a woman, compared to the men in leadership positions, is not good for business. • Men might get upset and then rant and rave, possibly threaten to quit. • Women will most likely cry but stay silent until they feel safe sharing what has upset them with someone they deem “safe” to confide in.
The good news? there is value to our you don’t do this, you will miss out on many opportunities for your people and teams to grow in a positive way.
When one of the women on my team comes to me with tears in their eyes, I tell them to “cry it out” or “get it out” with me, because it is only when they feel safe that they will bring the real issue to the surface, which
tears, and the idea that emotions are bad and have no place in business is down-right wrong! There is evidence that emotions and empathy specifically are good for business.
The problem that we all have to overcome is that men built the professional word and devised the rules that were geared toward them at the time. Women are still trying to figure out how to behave in this world where we are told to be calm under pressure, diligent in the way we carry ourselves, and always mindful of keeping our emotions in check.
Companies and business leaders need to have managers and leaders who are in tune with their emotions and their team’s emotions.
They need to encourage everyone to not stifle emotions or ambitions to please others, but rather encourage curiosity, empathy, and understanding.
As professional women, we bring value to our teams and create a dynamic that didn’t exist 50 years ago. Our emotions are a big piece of this dynamic.
Just as we would tell a male colleague who is upset and agitated to cool off or go take a cold shower, we need to find ways to address women when their emotions bubble over. If many times benefits everyone on the team and the company.
It is not uncommon for men and women to get emotional during our weekly meetings because we have encouraged each person’s individual value, and we focus on the pursuit of our company values, instead of norms and biases.
The most challenging thing we have to address is the double-edged sword where a single action or show of emotion can be perceived two different ways.
We have all heard or seen examples where a woman who is: • Kind, compassionate, and is well liked but told they lack leadership. • Confident and outspoken but chastised for being “too aggressive” or competitive.
Supporting your team to harness and channel emotions, while allowing an outlet, rather than suppressing or criticising, will keep your team more engaged and motivated. It will make them want to work for you for a long time to come.
Suppressing Emotions creates a
negative atmosphere. Men are less likely to seek help for mental health
BIG GIRLS DO CRY
CONTINUED FROM PAGE 17
issues. This type of habit not only damages productivity but can also lead to missed opportunities for selfdevelopment and improvement.
Above all else the people who feel emotional about their jobs are the ones who really, really care! As a business owner or leader you should want an office full of tears and tissues!
Emotional Intelligence is vital for selling to clients, building morale within your team and building business relationships
• High EI makes for a top performing leader. • Self Awareness you need to develop a keen understanding of who you are in the world.
So, how do you improve your empathy & emotional intelligence at work? Take the time to TeamBuild.
ROLE PLAYING GAMES
Have team members put themselves in someone else’s shoes and see different perspectives. We have had adult show and tell, where our team each brought an artifact that had the biggest significance to them. Everyone took a turn telling the story behind the artifact. Every time we have done this exercise, there has never been a dry eye, gender aside.
Show your team that you care about them and their feelings. You can do this a number of ways: • Birthday celebrations. • Milestone celebrations. • Hand-written notes. • KAM Bams — this is an anonymous message sent about other team members.
Use your voice to support women • Amplification is one example where someone will repeat another woman’s idea if they are ignored or overlooked. This results in the
person getting credit where it is due. • “No interruption” rule: Privately make men aware of their habit and how it makes people feel.
Empathy is vital for understanding your customers’ pain points and helps you have the ability to solve them. Empathy helps leaders understand their staff’s developmental needs and motivate them.
MISCONCEPTIONS ABOUT EMOTIONS
Tears are not always a sign of sadness. Tears are usually due to anger or frustration, so if you have a woman who works for or with you, find out what she is frustrated about. Get to the root of the issue and put yourself in her shoes. Would you be as upset if you were experiencing the same issues?
Some men withhold feedback from female coworkers because they fear they will cry.
Studies have found that in board meetings, women spoke as much as men only when the board was at least 80% female. Men spoke the same amount whether or not they were in a minority.
Find and test ways to get everyone’s input and feedback. Use the method that results in the most open and honest communication, until you see that all members feel safe to be who they are.
Above all else, put on your big girl shoes, those 4-inch heels and grow into the significant person you were created to be. Dreams often come one size too big so we can grow into them. n
THOUGHT THOUGHT LEADER
According to the U.S. Bureau of Labor Statistics, loan officer and mortgage professional employment growth was forecasted to increase approximately 1% each year until 2030. However, in 2020 and 2021, our industry saw a flurry of growth as a result of low mortgage rates and a hot real estate market. Like other lenders, Norcom Mortgage experienced this surge first-hand, and while some of our new loan officers had previous mortgage experience, others did not. Despite their level of experience, Norcom puts all of its new loan originators through a 30-day onboarding process where we review strategies Greg Radding and philosophies on building a loan originator “Rock Star” team, which include:
• Access to Management = Hands-On Instruction, Transparency and Less
Bureaucracy — To be successful in this industry, we believe loan originators need to have hands-on instruction from those who have been in their shoes.
Norcom Mortgage was established by loan officers and originators, so our management team understands the challenges our loan officers face on a day-to-day basis. This is why they are dedicated to mentoring and providing our loan officers and originators with the knowledge they need to thrive. Whether it is being onsite at one of our locations, answering emails and phone calls, or leading training sessions, our management team makes themselves readily available to all of our employees — seven days a week. This interaction and work environ-
ment also gives our loan originators the ability to work faster as they have less “red tape” to go through to get loan approvals.
• Communicate, communicate,
communicate! — As with any business, if you work as a team, listen to your employees and customers, share information and ideas, and are transparent, your business prospers.
At Norcom, we provide our employees with several opportunities to collaborate and share their experiences and concerns, which helps us achieve our goals and do our best. There are monthly and weekly calls to review national real estate trends, housing market data, mortgage product changes, sales and closing techniques, and any new technologies.
These meetings are in addition to our mentorship and in-field support program where the management team counsels employees and highlights the company’s vision and goals.
• Utilize all of the Business Tools
Available to You — While this seems very basic, some loan originators get stuck doing business one way, and don’t take the time to educate themselves on new technologies and tools that may be available to them.
For example, social media platforms offer mortgage professionals another way to market themselves to their referral sources and position themselves as experts or influencers in their field. However, loan originators need to be in tune with the ever-evolving algorithms, or their content won’t be seen. By taking the time to learn about the newest marketing and sales tools, you’ll be more efficient at your job, and in turn, be able to close more loans.
Other “business tools” to consider are community groups like your
Chamber of Commerce or Rotary. By involving yourself in your community, you’ll not only perfect your networking skills, but establish a rapport with other business leaders who could end up being a referral source. • Go for Gold — EVERY DAY — This mantra isn’t just about closing loans and achieving sales goals; it’s also about providing exceptional customer service.
Loan officers wear many hats. Customers expect you to be knowledgeable about all of the mortgage products available, provide them with the best mortgage rate and options, return phone calls promptly, meet critical deadlines, and most of all, be transparent about the loan process.
Those who are self-motivated, have an established marketing and sales plan, and a desire to deliver “gold” every day will stand out from the pack. Their personal brand will flourish and customers will seek them out for their mortgage needs.
As the industry looks to recruit and onboard other professionals, ask yourself, are you preparing and providing the support your employees need to achieve this “gold standard”?
At Norcom, many of our employees have been with us for more than 10 years. So, if you can’t answer that question and your attrition rate is 10% or higher, it may be time to reevaluate and take a page out of our book. Greg Radding is the Senior Vice President, Retail Lending for Norcom Mortgage. He can be reached at greg@norcom-usa.com or (860) 899-3790.
