Guild Mortgage Grows Impact through Expanded Guild Gateway to Homeownership Assistance Program

Rhea-AI Summary

Guild Mortgage (NYSE: GHLD) has expanded its Guild Gateway to Homeownership Assistance program, granting over $3.7 million to assist 683 homebuyers with closing costs. The program now covers five Metropolitan Statistical Areas across the U.S., offering up to $5,000 in lender credit. Guild has also introduced new initiatives, including:

1. FNMA HomeReady First: Provides $6,500 in total credits for first-time homebuyers.

2. Freddie Mac BorrowSmart Access: Offers $3,000 in down payment assistance in 10 metro areas.

These programs aim to support underserved communities and first-time homebuyers by addressing major obstacles to homeownership, such as down payments and closing costs.

Positive

• Expanded Guild Gateway to Homeownership Assistance program to 5 MSAs, granting over $3.7 million to 683 homebuyers
• Introduced FNMA HomeReady First program, offering $6,500 in total credits for first-time homebuyers
• Implemented Freddie Mac BorrowSmart Access program, providing $3,000 in down payment assistance in 10 metro areas
• Upgraded 3-2-1 Home Plus Program for first-time homebuyers with low-down payment options

Negative

• None.

Insights

Financial Analyst

Guild Mortgage's expansion of its Gateway to Homeownership Assistance program marks a significant step in addressing housing affordability challenges. The program's growth, now covering five Metropolitan Statistical Areas (MSAs) across multiple states, demonstrates Guild's commitment to expanding access to homeownership in underserved communities.

The financial impact is noteworthy, with Guild granting $3.7 million in assistance to 683 homebuyers since the program's inception in 2022. This translates to an average of about $5,400 per homebuyer, a substantial amount that can significantly reduce the barrier to entry for first-time homeowners.

The introduction of additional programs like FNMA HomeReady First and Freddie Mac BorrowSmart Access further diversifies Guild's portfolio of assistance options. These programs, offering $6,500 and $3,000 in assistance respectively, could potentially increase Guild's market share in the first-time homebuyer segment.

From an investor's perspective, this strategic move could position Guild Mortgage favorably in the competitive mortgage lending market. By focusing on underserved communities and first-time homebuyers, Guild is tapping into a growing demographic that many traditional lenders have overlooked. This could lead to increased loan originations and a more diverse customer base, potentially driving long-term growth and stability for the company.

However, investors should also consider the potential risks. Lending to first-time homebuyers and in underserved areas may carry higher default risks. It will be important to monitor the performance of these loans over time to ensure they don't negatively impact Guild's loan portfolio quality.

Market Research Analyst

Guild Mortgage's expansion of its assistance programs is a strategic response to current market conditions and demographic trends. The U.S. housing market has been challenging for first-time buyers, with high home prices and rising interest rates creating significant barriers to entry. By offering substantial closing cost assistance and down payment support, Guild is addressing a critical need in the market.

The expansion to new MSAs in Arizona, South Carolina and Texas is particularly noteworthy. These states have seen significant population growth and housing demand in recent years. For example, the Phoenix-Mesa-Chandler MSA has been one of the fastest-growing metro areas in the U.S., making it a prime market for first-time homebuyer programs.

Guild's focus on underserved communities aligns with broader industry trends towards more inclusive lending practices. This approach not only serves a social purpose but also opens up new market opportunities. The 683 families assisted so far represent just a fraction of the potential market for these types of programs.

The introduction of programs like FNMA HomeReady First and Freddie Mac BorrowSmart Access demonstrates Guild's ability to leverage partnerships with government-sponsored enterprises. This could provide a competitive advantage, as these programs often come with more favorable terms for both the lender and the borrower.

Looking ahead, the success of these programs could influence industry standards and potentially lead to increased regulatory support for similar initiatives. This could create a more favorable operating environment for lenders like Guild who are early adopters of such inclusive lending practices.

Lender Grants More Than $3.7 Million, Assisting 683 Homebuyers with Closing Costs; Delivers on the Promise of Home in Underserved Communities

SAN DIEGO--(BUSINESS WIRE)-- Continuing its work to deliver the promise of home in underserved communities across the U.S., Guild Mortgage (NYSE: GHLD), a leading national independent mortgage lender, announced new programs and initiatives to better meet the needs of underserved borrowers and a broad expansion of its Guild Gateway to Homeownership Assistance program.

Guild Gateway to Homeownership Assistance is a proprietary lending program that provides up to a $5,000 lender credit toward closing costs for designated census tracts to homebuyers purchasing in or currently residing in an eligible Metropolitan Statistical Area (MSA). Since launching Guild Gateway to Homeownership Assistance in 2022 in St. Louis, Guild has helped 683 families and provided assistance funds exceeding $3.7 million. Guild has since expanded the program to four new MSAs in Arizona (Phoenix-Mesa-Chandler MSA), South Carolina (Columbia MSA), and Texas (Dallas-Plano-Irving MSA and Fort Worth-Arlington-Grapevine MSA). The program can be paired with Conventional, FHA and VA financing, allows for down payments ranging from 0%-3%, and includes mandatory homebuyer education to set first-time homebuyers up for long term success.

“Guild recognizes the importance of leveling the playing field for first-time homebuyers and traditionally underserved borrowers alike to create a more inclusive path to homeownership,” said David Blazek, director of product development for Guild. “We see Guild Gateway to Homeownership Assistance as an important tool to expand fair access to credit and are gratified with the success this program has already seen and the real impact it’s made for hundreds of families. We look forward to seeing that impact grow as we expand the program to additional areas of the country where this assistance is needed most.”

In addition to its Guild Gateway to Homeownership Assistance program, Guild is now offering qualified homebuyers FNMA HomeReady First, a Special Purpose Credit Program (SPCP) from Fannie Mae, providing a $5,000 credit, to which Guild adds a credit of $1,500 to help with down payment and/or closing costs for first-time homebuyers. Eligible homebuyers just need to complete a free homebuyer education course and currently live in qualifying area, but can purchase anywhere. This program has already served nearly 100 families, representing $650,000 in assistance against total funding of $29.4 million.

Guild also offers the Freddie Mac BorrowSmart Access program which provides $3,000 in assistance toward the down payment of qualifying homebuyers. It can be used alone or with other down payment assistance programs provided by Guild. The 10 metro areas covered by this Freddie Mac program include: Atlanta, Chicago, Detroit, El Paso, Houston, McAllen, Memphis, Miami, Philadelphia and St. Louis. To qualify for the program, a first-time homebuyer must have an income equal to or less than 140% of the area median income (AMI) and meet all other Freddie Mac lending guidelines. For more information on qualifying income levels, use the area median income tool from Freddie Mac.

“Purchasing a home is an American Dream, but for many there are obstacles and barriers that stand in the way,” said David Battany, EVP of capital markets, Guild Mortgage. “Providing down payment assistance to first-time homebuyers in traditionally underserved communities can help them overcome one of the largest obstacles to homeownership.”

Guild is consistently recognized for its impact in the communities it serves and as an early mover on programs designed to help first-time homebuyers. In 2022, Guild introduced its Complete Rate Program, powered by FormFree, that evaluates rent and other consistent payment history in place of traditional credit reports for home loans, helping first-time homebuyers overcome another major obstacle for homeownership. The company also upgraded its 3-2-1 Home Plus Program, designed to provide first-time homebuyers with a low-down payment option and flexibility to make the home their own.

About Guild Mortgage

Guild Mortgage Company, a wholly owned subsidiary of Guild Holdings Company (NYSE: GHLD), was founded in 1960 and is a nationally recognized independent mortgage lender providing residential mortgage products and local in-house origination and servicing. Guild employs a relationship-based loan sourcing strategy to execute on its mission of delivering the promise of home ownership in neighborhoods and communities across 49 states and the District of Columbia. Guild’s highly trained loan professionals are experienced in government-sponsored programs such as FHA, VA, USDA, down payment assistance programs and other specialized loan programs. For more information visit Guild Mortgage.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731099540/en/

Melissa Rue

Nuffer, Smith, Tucker

mkr@nstpr.com

(208) 850-5939

Source: Guild Mortgage Company

FAQ

How much has Guild Mortgage (GHLD) granted through its Gateway to Homeownership Assistance program?

Guild Mortgage has granted over $3.7 million through its Gateway to Homeownership Assistance program, helping 683 homebuyers with closing costs.

What is the maximum lender credit offered by Guild Mortgage's (GHLD) Gateway to Homeownership Assistance program?

Guild Mortgage's Gateway to Homeownership Assistance program offers up to $5,000 in lender credit toward closing costs for designated census tracts in eligible Metropolitan Statistical Areas.

How many Metropolitan Statistical Areas (MSAs) does Guild Mortgage's (GHLD) Gateway to Homeownership Assistance program cover?

Guild Mortgage's Gateway to Homeownership Assistance program now covers five Metropolitan Statistical Areas across the United States.

What is the total credit amount offered by Guild Mortgage (GHLD) through the FNMA HomeReady First program?

Guild Mortgage offers a total of $6,500 in credits through the FNMA HomeReady First program, which includes $5,000 from Fannie Mae and an additional $1,500 from Guild.