#580 credit score

[kentuckybats]

Comparison chart explaining the different credit score requirements for FHA, VA, USDA, and Fannie Mae loans in Kentucky

Here’s a comparison chart explaining the different credit score requirements for FHA, VA, USDA, and Fannie Mae loans in Kentucky for a home loan: Table   Loan Type FHA Loan VA Loan USDA Loan Fannie Mae Loan Minimum Credit Score 500 (10% down) or 580 (3.5% down) no minimum score no minimum score 620 Down Payment 10% (with credit score 500-579) or 3.5% (with credit score 580+) No down payment…

[gcamortgagesblog]

Buying A House With A FHA 203k Loan Explained

If you're in the market for a new home, you may have heard of the FHA 203k loan. This type of loan allows you to purchase a home that needs some renovations with a single loan that covers both the purchase price and the cost of the renovations.

What is an FHA 203k Loan?

An FHA 203k loan is a type of mortgage that allows you to purchase a home and finance the cost of renovations at the same time. There are two types of 203k loans: the standard 203k loan and the limited 203k loan. The standard 203k loan is for more extensive renovations, such as structural repairs, while the limited 203k loan is for smaller repairs, such as replacing appliances or installing new flooring.

With an FHA 203k loan, you'll need to work with a contractor to create a detailed renovation plan as per FHA loan requirements, which will be submitted to the lender for approval. Once the loan is approved, the funds will be disbursed to the contractor as the work is completed. This means that you won't have to pay for the renovations out of pocket, and you'll only have one loan payment to make each month.

Step 1: Determine if You're Eligible for an FHA 203k Loan

Before you can apply for an FHA 203k loan, you'll need to make sure you meet the FHA loan requirements. To qualify for this loan, you must:

Have a minimum credit score of 580

Have a debt-to-income ratio of no more than 43%

Have a down payment of at least 3.5%

Use the loan to purchase a property that will be your primary residence

Have a reliable source of income

Step 2: Find a Property That Needs Renovations

Once you know you meet all the FHA loan requirements for an FHA 203k loan, you can start searching for a property that needs renovations. It's important to keep in mind that not all properties are eligible under FHA loan requirements for this type of loan. The property must meet the following requirements:

It must be a one- to four-unit property that has been completed for at least one year.

The property must be located in a community that meets certain standards for safety and livability.

The cost of the renovations must be at least $5,000.

The renovations cannot include any luxury items, such as swimming pools or outdoor kitchens.

It's important to work with a real estate agent who is experienced in working with FHA 203k loans, as they can help you identify properties that meet these FHA loan requirements.

Step 3: Work with a Lender to Get Pre-Approved for a Loan

Once you've found a property you're interested in, you'll need to work with a lender to get pre-approved for an FHA 203k loan. During this process, the lender will review your credit score, debt-to-income ratio, and other financial information to determine how much you can borrow.

It's important to work with a lender who has experience with FHA 203k loans, as the process can be more complex than a traditional mortgage. Your lender can help you navigate the process and answer any questions you may have.

Step 4: Get a Home Inspection and Create a Renovation Plan

Before you can apply for an FHA 203k loan, you'll need to get a home inspection and create a renovation plan. The home inspection will identify any issues with the property that need to be addressed, and the renovation plan will outline the scope of work and estimated costs.

It's important to work with a licensed contractor to create the renovation plan, as this will be submitted to the lender for approval. The renovation plan must be detailed and include all of the work that will be done, as well as the estimated costs.

Step 5: Close on the Property and Begin Renovations

Once your loan is approved and you've closed on the property, you can begin the renovations. The funds from the loan will be disbursed to the contractor as the work is completed. It's important to work closely with your contractor throughout the renovation process to ensure the work is done to your satisfaction.

Buying a house with an FHA 203k loan can be a great option if you're interested in a fixer-upper. By following these steps and working with experienced professionals, you can successfully navigate the process and create the home of your dreams.

[clarencecloutier]

Navy Federal Credit Union Hack 2023 | Insider Tips Get Navy Fed Credit Card with 580 Credit Score!

Source: Navy Federal Credit Union Hack 2023 | Insider Tips Get Navy Fed Credit Card with 580 Credit Score! from William Pang https://ift.tt/KMX2TBn

[jarrettboone]

Navy Federal Credit Union Hack 2023 | Insider Tips Get Navy Fed Credit Card with 580 Credit Score!

Source: Navy Federal Credit Union Hack 2023 | Insider Tips Get Navy Fed Credit Card with 580 Credit Score! from William Pang https://ift.tt/xzjH7NU

[bondstreetmortgage]

FHA Cash-Out Refinance – A Pathway To Access Extra Funds

FHA cash-out refinancing can be your option if you lack funds for your current financial obligations. With the FHA cash-out refinancing, you can refinance your mortgage and get access to cash for the equity in your home. In the current article, let us unpack the requirements and benefits of FHA cash-out refinancing.

FHA cash-out refinancing

FHA cash-out refinancing is a unique type of mortgage refinancing insured by the Federal Housing Administration (FHA). The homeowner is choosing to go with cash-out- refinancing can replace their current mortgage with a new one and get a more significant loan amount. The difference between the latest mortgage and the remaining balance of the current loan can be obtained as a cash for your financial needs.

Are you eligible for FHA cashout refinance?

If you want to access some extra funds on your home equity, consider conducting an eligibility check for FHA cash-out refinancing. Like your first mortgage, applying for refinancing needs you to meet some eligibility requirements.

Credit score: Many mortgage providers have specific credit score requirements to qualify for a refinance mortgage loans. It can be closer to 580. However, you need a minimum credit score of 500 to be eligible for cash-out refinance.

Debt income ratio: The requirements of DTI vary per lender depending on the credit score. Many lenders want their borrowers to have a 50% or lower debt-equity ratio. However, there is enough possibility for borrowers to qualify for FHA mortgage loans cash-out refinancing even with a high debt-equity ratio.

Loan to value: The loan to value is the amount of home equity you have compared to its current value. You can qualify for FHA cash-out refinance when your LTV does not exceed 80% of the home value.

Payment history: The mortgage lenders check your payment history to approve the new loan. To stand eligible for the loan, you should not have any late or missed payments towards your home mortgage in the past 12 months.

Length of residence: You should have lived in your home for at least a period of one year to qualify for the loan.

The pros and cons of FHA cash-out refinancing.

Pros

Improved cash flow: By replacing your current loan with a refinance mortgage, you can lower your monthly repayments towards the loan. Lowered monthly payments can offer you extra cash each month, improving your cash flows. The surplus funds in your pocket can be used for savings or handling other expenses.

Lower interest rates: FHA cash-out refinancing allows you to fetch the new loan at favorable terms and lower interest rates than your current loan.

Potential Tax Benefits: Interest paid on the loan, including the additional amount borrowed through a cash-out refinance, may be subjected to tax deductions. You can reduce the payable tax after deductible interest.

Cons

Additional costs: FHA cash-out refinancing is also subject to payment of upfront costs and fees, including title insurance, appraisal fees, origination fees, and closing costs. You should compare these with multiple lenders and review these costs to outweigh the benefits with expenses.

[sagestreetrealty]

Think you need an 800 credit score to buy a home? Not true! 🙅‍♀️ While good credit helps, there are mortgage options for buyers with credit scores as low as 580 (or even lower in some cases!). 🏡 Programs like FHA loans, VA loans, and other flexible options make homeownership possible for many.

Even if your credit isn’t where you want it to be, it’s never too late to start improving it. 📈 We can connect you with trusted professionals to guide you through the process.

Don’t let your credit score hold you back from your homeownership dreams—let’s create a plan that works for YOU! 💬

#RealEstateTips #HomeBuyingMythsDebunked #SageStreetRealty

[beloved-31-proverbs-women]

Buy a duplex

If your credit score 580 or higher w/ 2 years of W2, Get a FHA Loan w/ 3.5% down, apply for down payment assistance and bring little to nothing to the table, find a loan officer, find a realtor, find a property, live in one side and rent the other out

Now you’re a landlord!!!

[parkplacenetwork]

Credit Scores Matter

Unless you’re a cash buyer, credit scores are the most important factor lenders consider in a mortgage application. It shows the ability to repay.

What is a good credit score?

*800 or higher: Exceptional

*740-799: Very good

*670-739: Good

*580-669: Fair

*579 or lower: Poor

#parkplacenetwork

[thelistingteammiami]

The 4 Biggest Myths That Are Holding Back Home Buyers

Buying a home for the first time can be confusing and intimidating. More so if many of the things you believe turn out to be myths that only hinder you from starting your home search or making an offer on a home.

We're here to help you clear those misconceptions so you’ll have the right mindset and strategies on your path towards homeownership.

1. “I need a 20 percent down payment.”

Saving for a down payment isn't only a challenge for many renters and non-owners alike; it’s a roadblock that hinders them from entering the housing market. And many first-time home buyers believe they still need a 20% down payment before they can get approved for a mortgage. That may be true a few decades ago, but that’s no longer the case these days. In fact, the median down payment for first-time buyers remains steady at 6 percent in the past several years. Times are changing, and through various government programs available, buyers are now allowed to put as little as 3.5% to achieve their American dream of homeownership.

Nowadays, you only need to be comfortable and confident in deciding how much you will give as a down payment. Sure, you must pay more for your mortgage each month (including Private Mortgage Insurance or PMI) if you put less than 20% of the home's purchase price, but it'll help you save more money on other financial goals and have a cushion for emergencies.

2. “I can't get a mortgage if I don’t have a perfect credit score!”

Similar to the 20% down payment, many Americans are also misinformed about the FICO score needed to qualify for a mortgage. They think that they need to have a “good” credit score of 780 or higher. But the truth is your credit score doesn't have to be perfect. The median credit score range for many approved mortgages in the past years is 670 to 739.

There are other factors that lenders take into consideration when deciding whether you'll be approved for a mortgage, including your employment history, debt-to-income (DTI) ratio, and the amount you can give as a down payment. Also, the required credit score also depends on the type of loan you’re getting. Conventional loans have the strictest standards and require a score of at least 620. Meanwhile, FHA loans need a minimum credit score of 580. So if you have a lower credit score, don’t think that you’re already out of the game. There are measures you can take to improve it before applying for a mortgage.

3. “I'll skip hiring a real estate agent to save money.”

There are many costs associated with buying a home, but there's no good reason for you to skip working with a realtor thinking that you can save money. In reality, you can get all the advantages of having a buyer’s agent working for your best interest for free. Yes, they do get a commission, but it is usually paid by the seller and is built into the home’s selling price. Even if you show up without an agent thinking that you can get a discount on the price, the consequence of that could be stress, and wasted time and money.

Using their expertise, negotiation skills, and comparables, realtors can help you get the lowest purchase price for your dream home. They can also help you understand the complicated real estate contracts and guide you through things like home appraisals, inspections, contingency clauses, among others.

4. “I'll wait until spring to start my home search.”

Traditionally, the housing inventory is greater in spring. Buyers are flooding the housing market and most sellers are putting their single-family homes or condominiums for sale. This heightened activity usually translates to escalating prices and multiple offers on properties. However, it's wrong to think that spring is the only “best” time for buying a home. All real estate markets are different, and you should base your decision on your personal circumstances and the local market conditions.

Sure, many people are looking to sell or buy in spring when the weather is nice and everyone is motivated, but there are ways to make a home attractive even in fall or winter. In some markets, it is better to start your search before or after the spring. There may be fewer homes available, especially during winter, but you might even find better bargains since sellers may want to relocate quickly or may be desperate to sell.

[divyarajput7]

Types of Home Loans: What You Need to Know Before You Borrow

Home loans are essential financial tools for individuals seeking to purchase or renovate a property. These loans come in various forms, each tailored to meet different needs, financial situations, and preferences. Understanding the different types of home loans can help prospective homeowners make informed decisions when selecting the right loan for their circumstances. Below is a detailed explanation of the most common types of home loans available in the market.

1. Conventional Home Loans

Conventional home loans are the most common type of mortgage used by homeowners. Unlike FHA or VA loans, these loans are not backed or insured by the federal government. Conventional loans can either be conforming or non-conforming:

Conforming Loans: These loans meet the standards set by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, including limits on the loan amount, borrower creditworthiness, and debt-to-income ratio.

Non-Conforming Loans: These loans do not meet the GSE criteria, typically because the loan amount exceeds the conforming limit or the borrower has a higher risk profile.

Key Features:

Requires a good credit score (typically 620 or higher)

Down payments may range from 3% to 20%

Interest rates may be fixed or adjustable

2. FHA Loans (Federal Housing Administration Loans)

FHA loans are government-backed loans insured by the Federal Housing Administration, making them a popular choice for first-time homebuyers or those with lower credit scores. The FHA provides lenders with insurance in case the borrower defaults on the loan, which lowers the risk for lenders and allows them to offer more favorable terms.

Key Features:

Lower down payment requirements, often as low as 3.5%

Flexible credit score requirements (typically 580 or higher)

Mortgage insurance is required for the life of the loan if the down payment is less than 20%

Available for primary residences only

3. VA Loans (Veterans Affairs Loans)

VA loans are home loans guaranteed by the U.S. Department of Veterans Affairs, specifically for veterans, active-duty military members, and their families. These loans offer several benefits, such as the possibility of zero down payment, competitive interest rates, and no requirement for private mortgage insurance (PMI).

Key Features:

No down payment is required (in most cases)

No private mortgage insurance (PMI) required

Competitive interest rates

Available to veterans, active-duty service members, and eligible spouses

4. USDA Loans (United States Department of Agriculture Loans)

USDA loans are government-backed loans offered to homebuyers in rural and suburban areas who meet certain income eligibility requirements. The USDA aims to encourage development in less populated regions by offering low-interest loans with no down payment.

Key Features:

No down payment required

Income limits apply, which vary based on location and household size

Competitive interest rates

Available for homes in rural and suburban areas as defined by the USDA

5. Jumbo Loans

Jumbo loans are non-conforming loans that exceed the maximum loan limits set by Fannie Mae and Freddie Mac. They are used to finance high-value homes and typically have stricter credit requirements and higher interest rates due to the larger loan amounts and higher perceived risk.

Key Features:

Loan amounts above the conforming loan limit (varies by location)

Higher credit score requirements (usually 700 or higher)

Larger down payment requirements (typically 20% or more)

Higher interest rates compared to conforming loans

6. Fixed-Rate Mortgages

A fixed-rate mortgage is a loan in which the interest rate remains the same throughout the life of the loan. This type of loan is popular for borrowers who prefer the stability of knowing their monthly payments will not change.

Key Features:

The interest rate remains constant for the entire term of the loan (typically 15, 20, or 30 years)

Predictable monthly payments

Ideal for long-term homeowners

May have higher initial interest rates compared to adjustable-rate loans

7. Adjustable-Rate Mortgages (ARMs)

An adjustable-rate mortgage (ARM) has an interest rate that can fluctuate over time, typically after an initial fixed-rate period. This means that monthly payments can change based on changes in interest rates, which can be beneficial if rates drop but pose a risk if rates rise.

Key Features:

Initial fixed-rate period (usually 3, 5, 7, or 10 years) followed by an adjustable period

After the initial period, rates can increase or decrease based on market conditions

Lower initial rates compared to fixed-rate loans

Monthly payments may increase over time

8. Interest-Only Loans

An interest-only mortgage allows the borrower to pay only the interest on the loan for a set period, typically 5-10 years. During this period, the principal balance does not decrease. After the interest-only period ends, the borrower must begin repaying both the principal and the interest, often leading to significantly higher monthly payments.

Key Features:

Initial period where only interest is paid (no reduction in loan principal)

Lower monthly payments during the interest-only period

Higher payments once the principal repayment starts

Risk of owing more than the home is worth if property values decrease

9. Balloon Mortgages

A balloon mortgage involves a large lump sum payment (the "balloon") at the end of the loan term, which is much higher than the regular monthly payments. Balloon loans often have shorter terms (5 to 7 years) and can be appealing for borrowers who plan to sell or refinance before the balloon payment is due.

Key Features:

Fixed payments for the loan term with a large lump-sum payment at the end

Shorter loan terms (typically 5 to 7 years)

Interest rates can be lower initially, but the large final payment can be a financial burden.

10. Home Equity Loans and Home Equity Lines of Credit (HELOC)

A home equity loan allows homeowners to borrow against the equity in their home, typically for purposes like home renovations, debt consolidation, or major expenses. It is usually structured as a second mortgage. Similarly, a Home Equity Line of Credit (HELOC) works like a credit card, allowing borrowers to draw on the equity as needed up to a limit.

Key Features:

Home equity loans offer a lump sum payment with fixed terms

HELOCs offer flexible access to funds with a variable interest rate

Both types of loans use the home as collateral, so there is a risk of foreclosure if the borrower defaults

11. Renovation Loans (FHA 203(k) Loan)

Renovation loans, such as the FHA 203(k) loan, allow homebuyers or homeowners to finance both the purchase or refinance of a property and the costs of its renovation or repair. These loans can be a good option for buyers interested in fixer-upper homes.

Key Features:

Financing for both the home purchase and renovation costs

Available for both buying a new home or refinancing an existing one

Must meet certain eligibility requirements for renovations

Can be used for structural and non-structural repairs

12. Reverse Mortgages

A reverse mortgage is a loan available to homeowners over the age of 62 that allows them to convert part of their home’s equity into loan proceeds. The loan does not need to be repaid until the homeowner moves, sells the property, or passes away.

Key Features:

Available only to seniors (62 years or older)

No monthly payments are required; the loan is repaid when the homeowner moves or dies.

The loan amount is based on the home’s value, the borrower’s age, and interest rates

Typically used to supplement retirement income.

Conclusion

Choosing the right home loan is a crucial decision in the home-buying process, and each type of loan has its advantages and trade-offs. Understanding your financial situation, your long-term plans, and the specific loan terms will help you make an informed choice. Consulting with a mortgage broker or financial advisor can further guide you in selecting the home loan that best suits your needs.

[chelseywaltersrealtor]

How to Buy a house with $100 Downpayment, 580 Credit Score and a FHA Loan

[whatcomcredit]

Credit Restoration: 5 Steps to Rebuild Your Financial Future

Credit restoration is an essential process for anyone looking to improve their financial health and open the door to new opportunities. Whether you are recovering from a financial setback or simply aiming to achieve a higher credit score, understanding how to navigate this journey can significantly impact your financial future. This blog post will outline five crucial steps that can help you rebuild your credit and enhance your overall financial well-being.

Understanding Your Credit Report and Score

To effectively begin your credit restoration journey, it’s crucial to grasp the details of your credit report and score. Your credit report is a comprehensive record of your credit activity, including your borrowing and repayment behavior, personal information, credit accounts, payment history, and any existing debts. Lenders use this report to evaluate your creditworthiness.

Your credit score, typically a number between 300 and 850, serves as a summary of your credit report. This score influences the interest rates and credit limits you may receive from lenders. Credit scores are generally categorized as poor (300-579), fair (580-669), good (670-739), very good (740-799), and excellent (800-850).

It’s essential to request a free copy of your credit report from the three major credit bureaus—Equifax, Experian, and TransUnion—at least annually. Thoroughly reviewing these reports helps you understand your current credit standing and identify areas for improvement. By staying informed about the contents of your credit report, you can take proactive steps towards effective credit restoration.

Identifying and Disputing Errors on Your Credit Report

Once you have your credit reports in hand, the next step in credit restoration is to identify and dispute any errors. Errors on your credit report can significantly affect your score, so it’s crucial to address them promptly. Common errors include incorrect account information, outdated debts, or fraudulent accounts opened in your name. To dispute an error, gather documentation that supports your claim, such as account statements or payment records. Contact the credit bureau reporting the error and provide a detailed explanation of the mistake along with your supporting documents. Each credit bureau is legally required to investigate your dispute, usually within 30 days, and will inform you of the results. If the error is confirmed, it will be corrected, potentially improving your credit score.

Creating a Budget and Paying Down Debt

To regain control over your finances, it’s crucial to create a detailed budget and focus on reducing your debt. Begin by itemizing all your sources of income and listing your monthly expenses, including rent, utilities, groceries, and discretionary spending. This will give you a clear picture of your financial situation and help you identify areas where you can cut back.

Next, list all your outstanding debts, such as credit card balances, personal loans, and medical bills. Prioritize these debts based on factors like interest rates and outstanding balances. Two common strategies to consider are the snowball method, which targets the smallest debts first, and the avalanche method, which focuses on the highest-interest debts.

Ensure you are at least making minimum payments on all your debts to avoid penalties and further damage to your credit score. Whenever possible, allocate extra funds to pay off debts more aggressively. This approach not only helps to lower your debt but also positively affects your credit utilization ratio, a key factor in your credit score calculation.

Automate your payments to avoid missed deadlines, and consider using budgeting apps to track your spending and stay disciplined. Over time, consistently adhering to your budget and reducing your debt load will contribute significantly to your credit restoration journey.

Establishing Good Financial Habits

Establishing good financial habits is essential for long-term credit restoration and overall financial health. One of the most effective practices is to make timely payments consistently. Missing payments can significantly impact your credit score, so setting up automatic payments ensures you never miss a due date.

Another important habit is to keep your credit utilization low. Aim to use less than 30% of your available credit, as this positively affects your credit score. If you find it challenging to manage your spending, consider setting up alerts on your accounts to notify you when you’re approaching your credit limit.

It’s also wise to avoid taking on unnecessary debt. Each application for new credit can lead to a hard inquiry on your credit report, which may temporarily lower your score. Be selective about when and why you apply for new credit to maintain a stable credit profile.

Monitoring your credit regularly can help you stay on track. Credit monitoring services alert you to significant changes or potential issues in your credit report, allowing you to address problems before they escalate. Additionally, using budgeting tools and financial planning apps can help you keep track of your spending, set financial goals, and stick to your budget. By consistently practicing these habits, you’ll create a strong foundation for a healthier financial future, making it easier to restore and maintain good credit over time.

Utilizing Credit-Building Tools and Resources

To enhance your credit profile, it’s important to take advantage of various credit-building tools and resources available to you. One effective strategy is to apply for a secured credit card. This type of card requires a cash deposit as collateral, which minimizes risk for the issuer and helps you build credit responsibly. Make regular, on-time payments and keep your credit utilization low to benefit the most from this tool.

Another valuable option is becoming an authorized user on someone else’s credit card, preferably a person with a strong credit history. This can positively influence your credit score by reflecting their good payment behavior on your credit report.

Credit builder loans, offered by many banks and credit unions, are another excellent resource. These loans are designed specifically to help individuals improve their credit scores. By making timely payments on a small loan amount, you can demonstrate responsible borrowing behavior, which is reported to credit bureaus.

Additionally, some rent reporting services allow your monthly rent payments to be reported to credit bureaus, helping to boost your credit profile. Utilizing these tools strategically can lead to gradual and sustainable credit improvement, paving the way for a healthier financial future.

Contact Us :

Address - 3409 Chandler Pkwy Bellingham, WA 98226

Phone - (360) 312-7164

Email - info@whatcomcreditrestoration.com

Website - Whatcom Credit Restoration

Blog - Credit Restoration: 5 Steps to Rebuild Your Financial Future

[r2d2stay]

1200 for rent, sure, 750 for mortgage, denied

That's pretty egregious right? That would be a pretty cool topic for a post, right? Here's a curatedtumblr thread about it, and here's the original post:

Wait a second, someone said they read the linked article, and only 1700 people qualified under this program, out of 5 million homes in a year. That's nothing!

Ah, but I tricked you.

This is a post about misinformation, misuse of statistics, and general internet best practices.

The top three comments at the moment are all super pessimistic, and in particular, the third, and first response to the second, are actively misinformed.

The 1700 thing is not entirely false! To quote the article:

"Positive rental history (PRH) has been included... since October 30, 2022, and lenders have been required to report PRH since March 25, 2023... Because of this policy change, as of August 31, 2023, 1,727 endorsements that otherwise would have required manual underwriting were accepted through TOTAL."

...There's a problem here, though, beyond the fact that it was only really active for 5 months or so (because why would lenders help you if they weren't forced to).

Why are we comparing 1727 to 5,000,000? Well, that's the number of extra homes bought, out of the number of extra homes, right?

Nah, sorry.

The Actual Statistics:

That's the number of extra homes of first time buyers, with at least 620 credit score, who wouldn't have been approved, who got extra homes.

Which means, we should be looking at those. First time buyers accounted for 32% of buyers (Statista and Opendoor corroborate, direct links updated to 2024, sorry) out of 4.03 million total (National Association of Realtors, also updated). That already cuts us down to 1.28 million.

620 credit score is... basically nothing here; that's less than 2% of current home applications (Ellie Mae), so basically everyone qualified on that.

And here's the big one: Who wouldn't have been approved? It's like, 10% of the rest.

Depending on source, you get somewhere between 86% and 90% general home approval rate, i.e. between 10% and 14% aren't approved. According to NAR again, 77% got financing, and of the remaining, 41% didn't apply, which roughly matches the 14% number.

In addition to that 41% who didn't apply, 12% were due to low credit, 9% insufficient down payment, 7% not enough cash in reserve, and 6% insufficient time in job. 30% were "other", with little bits making up the rest.

Okay, so the low credit people are probably out; you can get loans at 580, so they wouldn't have benefited. If we keep everything else, that leaves 10.8%, or out of 1.28 million, 138,000 people per year.

Note that this isn't accurate. In particular, first time home buyers are more likely to not get approved. But this is an okay approximate.

So we've gone from 5 million to 138,000, a multiplier of 36.

"But that's still like 1% of the people!", I might hear you say.

And this is true! For 2023.

Policy Takes Time Guys

For comparison, the Affordable Care Act recently released data showing that about 12 million people were covered in 2013. But in 10 years, this has expanded to 45 million people. That's going from about 4% of the population, to about 15%!

You might say, significantly fewer people signed up each subsequent year, then, right? You'd be technically correct, but Positive Rental History has every indication that it will do better than the 4x rate, not worse.

First, the ACA was targeted at uninsured people in the US. That's already a target of less than 8% of the population; compare to the 34% that currently rent. It has way more room to expand.

Second, home loans are more of a continuous stream, while covered individuals are more of a population. (This isn't entirely true, as you can think of "homeowners" as a population, but given that we just said less than a third of home buyers are first time, I think this is fine.)

You can think of it this way: When you help someone buy a home, you're assisting in 1 purchase. When you help someone get health insurance, you help them buy many things over time; if they need it once a year, you're assisting in 1 purchase a year. So just as 12 million purchases a year is analogous to 1700 purchases a year, 45 million purchases a year is analogous to 6000 purchases a year.

Third, they didn't even fully implement it until halfway through the year. Obamacare was plagued by the fact that it had a 90 minute crash at the beginning, before it even kicked in - What's not forcing renters to follow this act going to do to the adoption rate? If we account for the 5 months renters were forced to play ball instead of 12, then it's more like 4100 houses a year.

Estimation With Wild Abandon

With all of this, it would not be unreasonable to expect this to go from 4000 houses to 20,000 over 10 years, helping well over 200,000 people buy houses. Not crazy good, but extrapolating linearly over the 30 year lifespan of the generation/mortgage cycle, that's 200k, then 400k, then 600k, for a total of 1.2 million houses.

(I should cite u/nat20sfail here, since while their math is wrong in several places, they did come to 120,000 in 10 years, which is pretty reasonable, and most of my numbers are following/correcting theirs.)

And we can do even better!

Because Knowledge is Power

The WHOLE POINT of the original post was to say people should be shouting this from the hills! Everyone should know that this is a thing that exists!

The reason that nearly 90% of applications are accepted is because people don't know that they can try. Memes about how awful getting a mortgage is, and worse, actual misinformation about it, is actively preventing people from buying homes! Over a quarter of affordable homes were purchased by corporations in Q1 2024. Take some of that back!

Now, should everyone who can pay 1200 rent with a 650 credit score be scrambling to make the $6090 3.5% downpayment on an FHA loan on a $174,000 house, paying roughly $754 for the loan and $371 in taxes and fees? No, obviously not. Not only do situations vary, there are more expenses than that and you should save a much larger emergency fund before going all in on a house.

However, if you do have at least a 620 credit score or are close enough to build it, have an emergency fund, can make either a bigger downpayment or buy a smaller house, are pretty sure you know where you want to live for the rest of your life, and are sick of paying rent? Biden/Harris has actively helped get you qualify for a house and/or lower your mortgage payment. Now you just have to go take advantage of it.