Across the nation, people are spending more time in their homes than ever before due to the COVID-19 outbreak. Homeownership allows individuals to design a space where they live, work and perhaps homeschool their children. Women no longer feel they have to wait until marriage to buy a home, compelled to create their own sanctuary, means of self-expression and financial wealth through homeownership.
Being more relatable to women’s desire of homeownership
Stay-at-home moms outnumber stay-at-home dads four to one: 7.9 million moms compared to slightly over 2 million stay-at-home dads. Women are very focused on what a community offers from healthcare and childcare, to government oversight and local support systems. They place a higher value on private external space, which is almost as valuable as internal space. From social media platforms to pulsing community engagement, women are looking deep into resources to plant their stake.
This is the perfect opportunity for lenders to engage with women about the benefits of owning a home, such as the ability to design their home to fit their needs without having to ask for permission from landlords. Women value creating a unique space from which to retreat from the outside world—one in which they control the climate, the decor, the layout. Although homeownership comes with its own set of responsibilities from managing the associated costs and maintenance, the freedom of owning your own home far outweighs these added duties.
Mothers will value family time while working on a house project together, creating memories that will last a lifetime. I will never forget when my mother was in the middle of remodeling her home. I had my first newborn son in my arms when I had to dodge the rain from hitting him while in the house.
Accessibility to real estate properties
When buying a home as a single woman with or without children, most women want to touch, see, hear, smell and experience the zen the property generates. This presents its own challenges with limited inventory and not all properties are accessible in person. My suggestion, especially for single mothers, is to have someone go with you as not having that second opinion or fall back while in the property can make all the difference.
How COVID-19 has changed the mortgage industry
Mortgage lenders face challenges as COVID-19 puts a direct impact on their ability to originate a residential mortgages when a borrower’s employment and income status may quickly change. With the onset of the COVID-19 pandemic, almost all loans have moved completely online and with all-time historically low interest rates, lenders have their hands full.
To accommodate this new normal, the GSEs announced temporarily-relaxed standards for appraisals and employment or income verification requirements. Meanwhile, the GSEs created more stringent underwriting requirements to ensure borrowers have continuity of income for new originations.
Serving women through personalization and diversity
Lenders can serve women homebuyers through personalization and diversification. Single women buyers might be overwhelmed by the process of applying for a loan, especially during this time of uncertainty. Thousands of women do not even dream of homeownership, yet qualify for a loan. There are several first-time buyer programs, grants and platforms for assistance.
There is a great opportunity of educating the potential buyers on so much more than the financial aspects for homeownership and providing support through the process of applying for a loan in order to achieve their dream of owning a home.
The loan officer needs to be the trusted partner in this business endeavor with a vested interest. What are the advantages of homeownership for women in terms of short and long-term gain? There are emotional and physical benefits in addition to the financial advantage of wealth building. Women are always asking their friends who they know and trust! The special time of being relatable and compassionate will always be memorable to your client. It’s how you make someone feel that matters in the long run.
According to Bloomberg, women make 85% of all purchasing decisions, and 91% of new home purchasing decisions, in the U.S. This means there are millions of clients potentially looking to work with women. If you are a women-owned business, leverage your certification and brand to get a leg up on the competition.
Having a diverse workforce helps you serve the needs of diverse customers, whether to relieve a language barrier or attend client preferences, and grow your bottom line. If you’re working with women buyers, women lenders can possess a unique understanding of what these clients want and need throughout the home-buying process.
Resources for single women homebuyers
Single women, including single mothers, have many assistance programs to help them in the home-buying process. Programs are offered by the Federal Housing Authority, the United States Department of Agriculture, and at the local and state level. Mortgage Credit Certificates and Individual Development Accounts are also at their disposal. These programs can help single mothers buy homes and assist in the down payment regardless if they have a low income or poor credit history. Some of the state and local resources beneficial to single mothers include:
FHA: The FHA offers programs for first-time buyers, or those who haven’t purchased in three years (helpful, perhaps in a divorce or for long-term renters) with some loans requiring as little as a 3.5% downpayment.
USDA: USDA loans are zero-downpayment mortgages for rural and suburban homebuyers, and they are suited for borrowers with limited funds, who might be ineligible for a traditional mortgage. USDA provides single-family housing direct loans and single-family housing guaranteed loans. The USDA acts as the lender in direct loans, while private lenders fund guaranteed loans which the USDA backs against default. In 2017, over 25% of single females (with and without dependents) received guaranteed loans, while over 51% of single females received direct loans.
Local and state resources: Many state and local communities offer government programs for low-to-moderate income buyers. You can search a down payment resource index to find a program in your area. The states with the most programs include California (380); Florida (238); Texas (181); and Maryland (84). The U.S. Department of Housing and Urban Development has an online directory to pinpoint resources by state.
MCCs: Some first-time homebuyers, including single mothers, can qualify for tax credits through state and local governments to offset mortgage interest if income qualifications are met.
IDAs: IDAS help people earning no more than 200% of the Federal Poverty Income Level save for a home downpayment by matching their savings. These organizations are an incredible way for lower-income single mothers to work toward homeownership. Savings can be as low as $25 and can be matched as high as an 8:1 ratio.
Niche Loans: Sometimes loans are available for a particular occupational or educational demographic such as union members or veterans. Search for these loans within professional groups associated with your niche.
The pull to own a home is especially intense for women seeking to create a sanctuary for themselves and stability for their children. Many women may not know about resources to help them in their home-buying process, so share this with a single mother you know on the path to homeownership. Having access to the right information could make a huge difference in her life.
To read the full August issue of HousingWire Magazine, click here.
