With financing harder to qualify for these days, wouldn’t you think builders and developers would be jumping at the opportunity to learn more about the HECM for purchase program?
Michael Branson from All Reverse Mortgage Company details that two of their customers have been told they couldn’t use a HECM for purchase because they weren’t aware that it existed and builders desire to direct business through its in-house lender.
Branson writes that they contacted the in house lender and were told that if the borrower could not be approved through them, they wouldn’t accept an offer. Even after offering to go in and explain the program to them and why it was in their benefit to accept the borrowers offer at full price, they declined.
After thinking about why the builder would decline an offer in this climate, Branson comes to the realization that there was too much fear of the unknown (ie. HECM for purchase). When you approach a builder with an approval letter to purchase a home using a program that requires no income and very little credit qualification, I can understand why they might be worried. One of the in house lenders even asked the borrower for a 1040 to qualify for a HECM…
However, it doesn’t mean they shouldn’t jump at the opportunity to learn about the program. I doubt they have tons of other things to do with banks giving tons of loans out to build new homes right now. Check out the link below to learn more about All RMC’s experience talking to banks and builders about the HECM for purchase.