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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 50 June 2024 F E A T U R E S T O R Y I n today's low-volume market cycle, mortgage originators can build business by focusing on pur- pose-built loan products designed to overcome the specific challenges homebuyers face in the current market. In a landscape marked by limited turnkey housing inventory, significant affordability issues, and relentless competition from cash-rich investors, homebuyers need more than plain vanil- la home loans. The key is to tailor the financial solu- tions to meet the needs of various bor- rowers, including first-time home buyers, those who are looking to move up, and buyers willing to purchase fixer-uppers. Positioning yourself to effectively help those borrowers navigate the complex- ities of the current market doesn't just build your business, it turns you into a homebuyer's hero. Strategic Solutions for Today's Homebuyers N ew construction financing and meeting the demand for new homes: According to the National Association of Home Builders (NAHB), in March, 33% of all home sales were new construction financing. That is a significant increase from the 13% average between 2000-2019 in new construction. While virtually all national homebuild- ers have mortgage divisions, custom builders and small- to mid-size local builders can be an excellent source of purchase volume. Offering one-time close and specialty products that help move-up buyers time the sale of their existing home to the closing date for a new home helps originators to tap into this market segment. Include manufactured home dealers in your marketing plan if you have financing for buyers who want to put a manufactured home on a lot they are buying or one they already own. Competing against cash offers … enhancing buyer competitiveness: The prevalence of cash offers in today's market cannot be overstated, with the National Association of Realtors (NAR) indicating that 28% of home purchas- es in April were all-cash transactions. This represents a competitive challenge for buyers relying on financing. MLOs can counteract this if they have loan programs providing a cash backup or a buy with cash and refinance later option for consumers. Closing date guarantees can also minimize contingencies, making purchase offers more competitive. Bridge loans and facilitating the transition for move-up buyers: Bridge loans address a critical market need for homeowners looking to upgrade. By providing the liquidity needed to purchase a new home before selling the current one, these loans remove a significant barrier for move-up buyers in a fast-paced market. Timing guarantees to ease transi- tions: Purchase guarantee programs add another layer of certainty for move-up buyers by guaranteeing that their home will sell within a specific time frame, and/or allowing them to stay in their existing home when new home construc- tion delays happen. Income producing options to make homeownership more affordable: As af- fordability challenges persist, innovative solutions, like Accessory Dwelling Unit (ADU) financing, become increasingly desirable. ADUs can expand a home's liveable space to accommodate multiple generations, or introduce potential rental income streams, making homeowner- ship more achievable and sustainable for a broader audience. Manufactured homes for afford- ability: Today's manufactured homes are not your grandpa's mobile home … they are factory assembled, energy-efficient, and come with features like porches and HOW TO BUILD VOLUME IN TODAY'S MARKET Wading through a down market is a challenge for all in the industry, but positioning yourself to help navigate through the complexities of the current market can turn you into a homebuyer's hero. B y H E N R Y B R A N D T Planet Home Lending LLC SVP, Divisional Manager H E N R Y B R A N D T is a retail originations expert with more than two decades of experience leading branches and high-producing mortgage loan originations professionals. Brandt was a successful producing Branch Owner and Regional Manager before joining Planet Home Lending. Today, he applies his street-based knowledge to mentor originators who want to grow their business and advance into management.