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August 2022

One-third of declined mortgage applications qualified for homebuyer assistance

August 2022

One of every three (33%) of declined loan applications were likely eligible for multiple homebuyer assistance programs, according to an analysis by Down Payment Resources (DPR).

DPR's analysis indicated a substantial share of mortgage loan applications were declined for reasons that could be addressed with homebuyer assistance. One-third of all declined purchase mortgage loan applications were rejected for either insufficient cash-to-close or disqualifying debt-to-income (DTI) ratios. These files were also eligible for homebuyer assistance at the time they were declined.

In fact, DPR found that, on average, declined loan applications were eligible for 10 homebuyer assistance programs.

Another key finding from DPR's analysis was that many declined loans could have been averted and recovered with homebuyer assistance.

DPR, the online tool available to brokers at Northwest Multiple Listing Service, integrates into Matrix and the Client Portal. It connects brokers and their clients to lists of potential financial programs available for specific listings.

Rob Chrane, CEO at Down Payment Resource, said "Our analysis definitively shows that homebuyer assistance programs are the most promising pathway to homeownership for a sizable share of the homebuyer population. Yet, homebuyer assistance programs are seldom offered as an option."