Just as the salary needed to afford the median-priced home in Greater Boston jumped nearly 23 percent, mortgage-buyer Freddie Mac announced a new tool Monday that can help lenders match borrowers to down payment assistance programs.
DPA One, as the tool is called, sorts down payment assistance programs down to the municipal level, along with home purchase price, borrower credit score and income and more via a standardized form. The tool also lets lenders compare up to three down payment assistance programs side-by-side.
“Time and again research reveals that the down payment is the single largest hurdle first-time homebuyers need to overcome to attain homeownership. But finding and comparing the many programs and their guidelines is challenging,” Freddie Mac Single-Family Senior Vice President of Acquisitions Sonu Mittal said in a statement. “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.”
DPA One is free to lenders, housing counselors and down payment assistance providers, Freddie Mac said, and already incorporates most state-run down payment assistance programs. However, most municipal and privately-run programs have not yet been added, but the program’s website includes ways that assistance providers can submit information to Freddie Mac for inclusion.
“State housing finance agencies help meet the affordable housing needs of their residents including making first-time homeownership more feasible for millions of people around the country by providing down payment assistance,” National Council of State Housing Agencies Executive Director Stockton Williams said in a statement. “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.”
The Freddie Mac announcement came as brokerage and listings portal Redfin released calculations by its economists showing that a buyer making a 20 percent down payment – traditionally typical for a move-up or downsizing buyer, but not a first-time purchaser – in Greater Boston now needs to make $194,188 to afford the monthly payment on the median-priced home, while such a buyer in the Worcester area now needs to make $118,640, 22.7 percent and 23.4 percent increases over this time last year, respectively.
The average interest rate on a 30-year fixed-rate mortgage hit 7.57 percent last week, according to Freddie Mac’s weekly survey, up from 7.18 percent at the end of August and 6.09 percent at the start of February.
“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments. But that’s not what’s happening now: Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates – and that’s propping up prices,” Redfin Economics Research Lead Chen Zhao said in a statement. “Buyers – particularly first-timers – who are committed to getting into a home now should think outside the box. Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country, or a more affordable suburb.”