Borrowers who cannot cover their closing costs sometimes turn to downpayment assistance programs offered through their state housing agencies. But now, veterans and servicemembers have another way to pay the freight.
NewDay USA, a major lender in the GI community, is lending to qualified applicants private financing to pay for settlement charges. The loan must be paid back over a five-year stretch, but if paid in full within a year, financing fees will be waived.
The loan, “New Day Home,” is aimed at vets and active duty personnel who have steady employment, strong credit and solid income, but who may not have the savings needed to overcome the closing cost obstacle. The loan is a fully underwritten, credit and income-approved personal loan, with no money down, at competitive rates.
With the boost, borrowers can compete with cash buyers and close in as few as 15 days.
The company calls NewDay Home a “transformational product designed to empower” the GI community to achieve homeownership. NewDay USA says the most significant barrier for veterans and active duty personnel who are looking to buy is not meeting the monthly payment on a mortgage, but rather, saving enough to pay the myriad number of settlement charges.
And when they do have enough cash on hand, many don’t want to wipe out their savings, leaving nothing for a rainy day.
NewDay has an industry-leading loan performance record with GNMA with a delinquency rate that is two-times lower than the industry average, the lender says. Today, 95% of NewDay’s clients are enlisted veterans.
Many real estate agents are unfamiliar with VA loans and their requirements and tend to steer their customers away from government financing. To combat those misconceptions, NewDay connects buyers with real estate agents who are familiar with the VA’s home mortgage benefit. NewDay’s loan officer “specialists” also work shoulder-to-shoulder with buyers to provide continuous guidance, from application to closing, so they can obtain all the housing benefits they have earned.
“Homeownership is a pivotal life moment, marking the beginning of a new chapter and is a right earned by our veterans and servicemembers through their sacrifice for our nation,” said Admiral Thomas Lynch, executive chairman of NewDay USA, in a stetment. “For many veterans, that means the ability to purchase a home without bringing a single dollar to the table upfront. Their service is their downpayment.”
