New American Funding (NAF) has garnered attention for its commitment to assisting underserved borrowers, particularly first-time home buyers. This focus makes it a prominent choice for those entering the housing market for the first time. NAF provides a diverse range of innovative loan programs, including their “cash buyer” program, which aims to streamline the home-buying process in competitive markets. In terms of affordability, NAF stands out, earning a high score from Yahoo Finance based on its broad array of mortgage options and accessibility. However, the lender’s home equity loan offerings remain somewhat opaque, leaving prospective borrowers with questions about their options in this area.
One standout feature of New American Funding is its “Pathway to Homeownership” program, which offers financial assistance of up to $8,000 for down payments and closing costs. This program is especially beneficial for first-time home buyers who may find it challenging to assemble the necessary funds upfront. Additionally, NAF’s “cash buyer” program allows the company to purchase a house outright, which can potentially facilitate a quicker closing and even savings on the home’s sale price. Flexibility is exemplified in the “I CAN” mortgage product that offers loan terms ranging from eight to 30 years, catering to different financial capabilities and helping buyers find a route to pay off their mortgages more efficiently.
For borrowers looking into Federal Housing Administration (FHA) loans, New American Funding plays a significant role in the market, positioned just outside the top ten for FHA loan volume according to 2023 Home Mortgage Disclosure Act (HMDA) data. However, the information available on their website regarding FHA loans is general and lacks specific details about NAF’s terms and requirements. The language often includes phrases like “some lenders may accept,” which fails to clarify NAF’s stance on these loans. Though convenient for newcomers seeking a general understanding of FHA loans, this vagueness could pose challenges for those seeking tailored advice.
The presentation of home equity products at NAF continues to be a point of confusion. Despite previous observations noting this issue, the website still lacks clarity regarding specific home equity offerings other than cash-out refinancing. Prospective borrowers may note that the language surrounding home equity lines of credit (HELOCs) and home equity loans is vague, often using phrases like “check with your mortgage lender” rather than specifying NAF’s policies. This obscurity is compounded by the website’s structure, which blurs the distinction between cash-out refinancing and traditional home equity loans, further complicating the borrowing experience.
On the matter of rates and transparency, New American Funding’s advertised mortgage rates may seem appealing at first glance, but they are significantly reduced with three discount points and a hefty 40% down payment — specifics that are not immediately clear to the consumer. For 2023, NAF’s mortgage rates are higher than the median rate, with a reported average of 6.57%. The lack of straightforward communication regarding rate conditions diminishes clarity and could potentially disappoint borrowers who may not qualify for these seemingly low rates after further scrutiny.
The digital resources provided by New American Funding are commendable, offering a robust toolkit for first-time home buyers, including guides, calculators, and educational materials aimed at enhancing financial literacy concerning home buying. Despite some challenges with the presentation of product offerings, the depth of information available can be valuable for those new to homeownership, assisting them in making informed decisions. New American Funding has been recognized for its broad array of home loan offerings and online resources, achieving a notably high score in affordability, while remaining competitive in the landscape of mortgage lending, provided that potential borrowers approach their application process with a keen understanding of each product’s specifics.
