Unlocking Washington State's Down Payment Assistance and the Art of House Hacking | Essential Mortgage Tips

Embark on a journey through the misunderstood realm of down payment assistance programs in Washington state as Bryan Laflamme and I, Aaron Morrow, your friendly neighborhood greater Seattle area Realtor tackle myths and reveal untapped opportunities. These financial leg-ups are not just for first-time homebuyers; they're open to savvy investors looking to broaden their horizons with FHA loans and even turn them into investment properties. As we unravel the Home Advantage program's intricacies, you'll see how it lends a helping hand with its zero-interest down payment assistance — a treasure trove within the Washington State Housing Finance Commission's offerings.

Picture this: a duplex where living in one unit and renting out the other makes your home an investment tool — welcome to the world of house hacking! During our talk, I share my conviction in this clever strategy, even disclosing plans to guide my offspring down this path towards financial independence. Whether you're an aspiring homeowner or a budding real estate mogul, this episode unpacks how triplexes and fourplexes could be your ticket to a flourishing property portfolio. And stay tuned — we promise to dive deeper into house hacking in a future episode, ensuring you're well-prepped for your real estate adventure.

The stakes are high, and the process can be daunting, but fear not — we dissect the importance of pre-approval in the home-buying adventure. You'll understand why the United States' conservative mortgage underwriting standards are pivotal in safeguarding against the instability of past markets. We share personal stories and reflect on how the journey to homeownership is bolstered by clear and early communication with your mortgage lender. Join us as we navigate through the realities of today's housing market, with an emphasis on making informed choices and setting yourself up for success.

👋 Considering a move to Seattle, Washington or its dynamic suburbs like Tacoma, WA & Bellevue, WA? Dive deep into what living in Seattle and its neighboring areas truly feels like.

Explore through neighborhood vlog tours, city pros and cons videos, and get unmatched insights into relocating to the Greater Seattle area! Transition confidently with guidance from a native Realtor® who's eager to help you settle in your perfect home! 🔑

Whether you are moving in 9 days or 9 months, give us a call ☎, shoot us a text 📝, or send us an email 📨 so we can help you make a smooth move to the greater Seattle, WA area! 

Aaron Morrow Realtor Serving (King, Peirce, & Snohomish counties)
📱Call or Text: 206-451-3771
📨Email: aaronmorrow@livinginthegreaterseattlearea.com
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This is my Intro to every Podcast and YouTube video 

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Transcript

Speaker 1: 0:15

Hey everyone. It's Eramar again, brian Laflame, where we got our fancy titles underneath here so you can know who's the lender, who's the realtor. We're both Washingtonians. This time Everyone's confused who has not been tuned into any of these past lives or anything like that. But glad to have you back. If anyone has been watching any of our previous lives, glad we have you. On all of streaming to all the platforms the YouTube's, the LinkedIn's, the Facebook's, the Clappers, the Instagram's, the TikToks, all of it. We're here, and today we are. We're going to talk about something that we mentioned on our last live stream. We're going to talk about down payment assistance programs here in Washington state for first time, home buyers that might be looking for a little bit of that down payment assistance help.

Speaker 2: 1:11

So hold on, I'm going to correct you right there. Hardly any of these down payment assistance programs require you to be a first time home buyer. A lot of people stop and say well, I can't buy a house because I'm not a first time home buyer and I don't have a down payment we got you.

Speaker 1: 1:25

Yes, yeah, I should. I should say that the majority of my clients I've worked with that have taken advantage of DPA were first time home buyers. However, brian is correct, you don't technically have to be a first time home buyer to take advantage of most of these first time home buyer programs.

Speaker 2: 1:42

It's actually a common myth.

Speaker 1: 1:44

I would even say the FHA loan. That's a common misconception too, not even DPA, but a lot of people don't know that that loan you just have to have been in the home for three years and then you can reuse that loan, if I'm correct, no, you could know there's.

Speaker 2: 2:00

So you can. You can get an FHA loan if you're not a first time home buyer and it is geared more towards first time home buyers. Historically, because of the lower down payment options, somebody doesn't have a home to sell or put down on another home. But rules around FHA is you can have one at a time unless you are moving. It's 100 miles away from where you currently are. So say you own a home in Washington and you're going to move your real, your jobs, relocating you to California. You can have two FHA loans. Now say you own a home in North Slope of Tacoma and you want to move down to the Proctor District and that's two. Or if you want to move over to Puyallup, that's too close, you got to get a conventional loan and FHA loan can also convert to an investment loan.

Speaker 2: 2:45

So say, you buy a house with an FHA loan three and a half percent down, you decide, hey, I'm going to make this my first rental. I've lived here a few years, I've got some equity. I'm going to take that equity. I'm going to buy a move up house because my life has changed. Well, you don't have to refinance that FHA loan out of the FHA loan in order to rent that house out. You can do it right then and there.

Speaker 1: 3:03

That's fantastic. Yeah, and that's again. That's something that I mean. I wasn't even aware of all that you know and you do business all day, every day.

Speaker 2: 3:12

This, these jobs, are your job and my job, both complicated and very nuanced.

Speaker 1: 3:17

Well, and then there's a lot of overlap, but for how much there is overlap, there's a vast majority of not overlap. It's kind of like if you look at, like, the picture of an iceberg right and how much is on the surface compared to how much goes elite and I would not want to switch rules. I love what I do and I'm sure you love what you do and I would not want to trade this. I've done both.

Speaker 2: 3:39

I started as a realtor. Then I did both real estate and lending and this is the one that's for me. I'll tell clients a lot. Even if I know a real estate question, I'm not going to answer it because then it gives them some tacit permission to ask me more complicated questions that I will not know. Like you're the expert in, spend all of your day eating, drinking, going to night and sleeping real estate, why in the world would I want to give somebody you know JV advice when I've got varsity right here like they're already?

Speaker 1: 4:09

talking about yeah, exactly right, yeah, yeah, and completely advice versa. I mean, that's why, when I will answer basic loan questions that I'm 110% aware of and I've confirmed, but there's a lot of times I'm even like you know what we got to check with Brian or like we're going to confirm with him or even just go to him. But then there's there's often times where I'm even like hey, why don't I, why don't I take care of the communication for you, where I will do a three-way email for you just to take care of that burden, where you don't have to get everybody in the subtle, you know make it easy peasy.

Speaker 1: 4:52

So we're all on the same team, we're not having to play a game of telephone. You know what I mean.

Speaker 2: 4:56

Yeah, and Aaron said that he will give mortgage advice if he is a certain percentage sure, and he already got it wrong, because 110% is not even a number. It's not even a number.

Speaker 1: 5:09

The math wasn't mapping on that one. Oh man.

Speaker 2: 5:15

So what are we?

Speaker 1: 5:15

talking about. Well, again, yeah, I think we should primarily go over different down payment and system programs that I mean there's a couple of different, like national ones, but like primarily we should focus on what on the state level, since we're here, yeah, washington state, yeah, for sure, I also sidebar, like, if we have enough time, I think it would also be cool to maybe talk about USDA, just because I know that's not down payment assistance, but it's also a very it's a nice loan that not that many people are aware of. We even have current clients are looking into it right now that you and I are working with. So it's on topic and it's a zero down payment loan that you don't have to have been in active or prior military like the VA loan to have access to it. You know what I mean, hey, brian's kid. So, yeah, I don't know. I think we should go over all of that, you know, I think it's a great idea, yeah.

Speaker 2: 6:17

So let's start with some Washington down payment assistance products.

Speaker 2: 6:19

Yeah for sure the. So the Washington Washington state has a housing finance commission and the Washington state housing finance commission, especially in the past decade, has really opened up who qualifies for down payment assistance. They've done it a few ways. They've done it because in ways where before they would only have capital raises and then once that money was gone, then the down payment assistance was gone. And there still are a couple of those programs, but the vast majority of programs use actually have an entire like mortgage servicing standard where we have investment investors to whom these loans get sold just like a non down payment assistance loan, which means the money is available into perpetuity. With that they've increased income limits for down payment assistance. Down payment assistance when I first started this had income limits as low as 70 grand. That's good money. But if you make $80,000 you were out in the cold and they've sense, and then it would be partitioned off by areas of the state. So right, didn't walla walla, or if you lived in Spokane, or if you lived in a walla, or if you live in Tacoma or you live in Seattle. They're all different down payment assistance income levels. Some programs still have a portion of that, but it's definitely not as her now says it was before.

Speaker 2: 7:37

The most important or the most popular down payment assistance program through the Washington State Housing Finance Commission is a program they call home advantage. The home advantage loan can be used with a V a loan and FH a loan or a conventional loan or a USDA loan. The most popular ways that we use them are with FH a loans and the way that it works is if you make at least 100, or if you make $180,000 a year or lower, you might qualify for this program. If you have a credit score of 620 or higher, you might qualify for this program. If you are going to owner occupy this house, you could qualify for this program. So their big, big kind of overarching rules are qualifying income of $180,000.

Speaker 2: 8:28

I'm going to stop you for just a second so you guys can rewind and replay this if you need to. Qualifying income is just the income we use to qualify you for the mortgage. Some loan programs have a household income requirement, like the USDA does, whether or not you're on the loan. As you're 18 or above and you have an income, they have to count that against the income limit. Home advantage is just what is the lender uses to qualify you. So if you make $150,000 a year and your spouse makes $75,000 a year, you think how man work to 25. We live in Redmond, we'd love to buy a house, but we can't save up the down payment for the amount of the price of homes here. You don't have to worry about that, because we would just then use the one spouse and then you know if you, if you qualify every other way for the loan.

Speaker 2: 9:12

We could just use the one income Right.

Speaker 2: 9:14

So it is a standard 30 or fixed FHL interest rates are a little bit above market and it's because the investor pool is smaller. But there is an investor pool. So before, when it was just a capital raise and then they would use that money until it was gone and then raise money again, those interest rates would be set for the next six months or eight months or three months or however long it took to get rid of that money. So the money would be with the interest rate would be with the interest rate is until that money is gone and it could be way above or way below market. With the home advantage program it floats a little bit above market but kind of moves with the maturations of the normal mortgage back. Security market that we've talked about shows past.

Speaker 2: 9:50

Okay, so you get a standard 30 year fixed mortgage and then for your down payment you get a percentage of your loan amount and down payment assistance at 0% interest and no payments until you sell the house, refinance the house, pay it off in 30 years or move out. 98.99999% of clients that we have done this for have gotten an FHA first mortgage, down payment assistance, second mortgage and then, as our equity position rose, they refinance from the FHA loan into a conventional loan to maybe get a lower interest rate and definitely get the mortgage insurance off. That down payment assistance loan is then just paid off the way the first mortgage is. You're not writing a huge check to pay this off. If you take 30 years to pay the house off, yeah, absolutely, you're going to write a check at the end. Well, let's put that in perspective 30 years ago, the median house price in Washington was $126,500.

Speaker 2: 10:43

So you were writing a check for about $4,500 or so, depending on how much dumping assistance you took, which no, nobody wants to write a $4,500 check, but if it's to pay your house totally off, that that hurts a lot less than what you're thinking of, the down payment assistance you might be looking at now 18 and $20, $22,000. That money as a grievous in 30 years.

Speaker 1: 11:04

Yeah, and if you end up, like most people, either refinancing out of it or selling the house, it's going to come for the proceeds. So, for instance, like take my scenario, for example, had I used when I bought my house in 2014, I bought my house in Covington, washington, for $282,000. Now it's currently fair market value is actually $640,000. Now if I had bought it on down payment assistance and refinanced it even let's say it even refinanced till now, I mean I'd have so much equity built up that would just eat. I wouldn't even noticed paying off.

Speaker 2: 11:54

And you don't know client has with that refinance.

Speaker 1: 11:57

Yeah, yeah.

Speaker 2: 11:58

One of the great stories is there's a real estate agent with whom we work who moved to Washington and got into the business. When he moved here to Washington he was in my down payment assistance class. He bought his house for the cost of his earnest money. The seller paid his closing or, excuse me, the cost of his inspection. So he paid a $500 inspection. The seller paid his closing costs, so he got his earnest money and his appraisal deposit back, and Aaron and I will do a show on what all those are in the future as well Kind of the costs of buying Right.

Speaker 2: 12:26

And then he had a 30 year fixed mortgage. He has since refinanced it down to a 15 year paid off that down payment assistance loan and his mortgage payment is lower than his 30 year fixed rate. Was when we that's amazing about the house Hundreds of thousands of dollars of equity and he came here starting, you know, a new career and a new life. And it would have been just like your instance If you had bought it with DPA. You would have refinanced to a lower rate and you wouldn't even have noticed the down payment assistance loan.

Speaker 1: 12:52

Yeah, that's fantastic. Yeah, that's awesome. I would have to say that I'm trying to remember what my thoughts were on this, because I had something to say regarding it, I think, because we actually have. I have a couple of clients that we're working with, one that we just pre approved the other day that we're on a zoom meeting together with, and they were looking at the FHA. I think they were looking at DPA to. Were they looking at DPA with multi family?

Speaker 2: 13:29

Yeah, the Housing Finance Commission, and as well as our local program at Moon Mortgage, will allow duplexes to have DPA now, which is crazy.

Speaker 1: 13:37

That's nuts guys Crazy cool.

Speaker 1: 13:39

Okay, I'm looking at multi-screens, even though, like I should just be looking at my camera, I've got three monitors active right now. This is huge, guys being able to. This is called house hacking. So, like if you're in a position and I've had I've had a lot of first time investors or a lot of clients take advantage of this. Where they go in and they buy a duplex, where they buy it on a loan that has very low down payment or a down payment assistance program that covers the cost of the entire down payment up front.

Speaker 2: 14:13

Hold on, I want to stop. I want to stop you. This is it, you guys. If you're listening to this podcast, if you're listening to a live stream, stop what you're doing and pay attention to this.

Speaker 1: 14:22

Right here this, right here what Aaron is going to talk to you about could absolutely change your life.

Speaker 2: 14:27

I'm not being facetious, I'm not exaggerating which is being facetious. This could change your life. Go ahead.

Speaker 1: 14:33

And nationwide too. If you're not just in Washington, because this could even help easier, like you can have an easier time, not in our state just because we are pricier here, but you might have more affordable multifamily if you're in other more affordable parts of the state or parts of the US, right? So, with this said, with house hacking, so essentially you go in there and you could and it starts minimum with two units, so like a duplex right? So you go in there and you work the numbers to make sense for you. Where, at worst case scenario worst case scenario you have a situation where you're living in one unit, you have a very low down payment or a down payment assistance program covering all of your down payment and some, if not all, of your upfront costs.

Speaker 1: 15:31

If you have negotiated right with the seller, like I'm talking about, maybe not upfront, like during the process, and we can get into this, but all sudden, done at closing, you might get all of your money back. Where you're in a situation where you got into that house for zero upfront and now you're in a situation where you can put a renter in the next unit and they're paying, at worst case scenario, half of your mortgage. That's like the worst case scenario. You're not doing it right. If you're worse than, that's your worst case scenario. Don't do it. It's a terrible deal if you can at least get it to where it's paying half your mortgage.

Speaker 2: 16:14

Don't buy it. This is such a this house hacking is such an incredible opportunity. It is what I'm requiring my children to do by age 20. I'll give you the down payment. I'll go sign it alone. You are buying a duplex, you are renting it out the other side and you are never selling it. You're moving on to the next and the next and the next. That's how much I believe in. This is my children as they become, and they ask me about all the time. They're starting the conversation now with them about it, and it's not too late if you're 35, 40, 45, 50, 65 and have been renting it. This is an incredible way to get it.

Speaker 1: 16:50

It's a really smart first buy. It's a really smart first buy. Now, not everyone's situation is the same. I would have done this too, had. I think it's different when because there's a lot of married couples that don't want to do this, they don't like the idea of living in one duplex there are a lot of married couples I work with that are like no, we're doing this, this is smart. Yeah, I, I think it's awesome. And then you can just go up from there, because more doors bring more opportunity, because then you can house hack a triplex, you can house hack a fourplex, because anything under four doors folks counts as single families.

Speaker 1: 17:37

You're not yeah, you're not doing commercial loans so we're not tied to crazy high down payment loans that you have to do with commercial.

Speaker 2: 17:49

A buddy whom I went to high school with that I've done some loans for and his entire. He's quit his job as a construction guy and he was doing some flips but what he really started to make money was when he stripped his equity out of his duplex to buy a triplex, his triplex to buy fourplex, and then his fourplex to buy another fourplex and then he bought apartment buildings. He did it all with the renters paying this mortgage, leveraging the equity of this asset to buy a larger asset, to have someone else pay for it and it is unique to real estate. And to tie it back into what we're talking about. You can start this with a zero down home loan that you live in either a single family, one unit or a duplex that you live in.

Speaker 2: 18:29

You're not gonna get rich tomorrow, but you're gonna start the path of generating that wealth and you don't have to wait to save 20% down.

Speaker 1: 18:36

I think it's great and I think what we're gonna do because we did title this about DPA and this is good People that are coming to learn about down payment assistance. This is great. This was our target audience for the live stream today, but we're also gonna talk about on a different episode on our podcast and our live stream, we will talk about house tagging, because I want that to be its own subject matter and I want it to be, yeah, because that is a whole. There's gonna be a whole different audience folks out there that are gonna wanna come just for that.

Speaker 2: 19:17

So yeah, we'll talk more about that. If you hear from down payment assistance, know that you also can do that.

Speaker 1: 19:21

But yes, that's what we're saying. The biggest takeaway and the biggest surprising thing to know is you can house hack a duplex and have down payment assistance, do it and if you have the right road tour and the right set of circumstances, you can go into the situation where you paid like nothing upfront for it. So let's talk about that. Let me give you an example. Now I can't give you this example on a house hack scenario, but I did have a most recent example and you could apply this to a house hack if the circumstance worked the same way. But essentially one of my roasts recent DPA program clients that bought single family and it would work with duplex as well, because it would be it's negotiation between you and the seller. But basically what would happen is you as the, as the buyer. You have the down payment assistance, which Brian with the FHA DPA is at up to 5%, or what is it for?

Speaker 2: 20:20

It is up to 5% of a client's loan amount.

Speaker 1: 20:24

Loan amount yeah.

Speaker 2: 20:26

There are three different options and two options within one, so you can have a 3% down payment assistance, which covers a lot of your down payment not all of it, though and that's the lowest interest rate.

Speaker 2: 20:36

You can have 4% down payment assistance with a 1% fee from the Housing Finance Commission so a closing cost and that'll cover all of your down payment and a little bit of your closing costs. That's the second lowest rate. You can have a 4% down payment assistance with no closing costs fee from the Housing Finance Commission, so no lender will 1% fees. You still have other closing costs, but it's a large portion that you don't have, and that's the third highest, second lowest or third lowest, second highest rate. Or you can have 5% with the highest rate and no fee. If, say, the seller just can't or won't pay all of your closing costs and you would rather keep money in the bank and you're like, yeah, I'm gonna afford a little bit higher payment for now, you would take the 5% down payment assistance. Your closing costs would be super low. It would cover your down payment and a real lion's share of your closing costs.

Speaker 1: 21:21

Okay, okay, yeah, that makes total sense. So with that, so with this scenario with my DPA buyer, I think what they did in that situation? They were three and a half down for FHA and they were only trying to initially get a half a percent on the down payment. But in that scenario we were going after properties that were sitting on the market for a while. So what we were able to do was find a property that sat long enough that we just walked into the property where it the property was perfect for my buyer and we negotiated the seller to pay all of the buyer's closing costs. So then we didn't have to ask for any of the closing costs on the down payment assistance program site. So then they were only claiming the three and a half from the DPA program, the down payment.

Speaker 1: 22:13

So what ended up happening in this scenario is client only initially had to upfront set aside money for earnest money deposit and that set in, that was set aside in the escrow account for the 30 days for the property to close and the client paid for their home inspection, which was about like 500 bucks, and then at closing they got their earnest money back, the I think the property was like 550,000. So they got the. They wrote the earnest money was 1%, which is pretty standard for this area. So they got like the 5,500 bucks back at closing. This is the situation, guys. They bought this home for 500 bucks upfront. When they close, you know they paid 500 bucks for that inspection.

Speaker 2: 23:11

Nothing else was due upon closing, they leveraged a half a million dollar asset that they get to use for $500. If historical appreciation shows that, the where did they buy this house?

Speaker 1: 23:26

This was in Pierce County, Puyall.

Speaker 2: 23:28

Okay, historical appreciation in Pierce County is 5.09%. It was how much? 550 was the price of the house.

Speaker 1: 23:35

Yeah.

Speaker 2: 23:36

So that means that their house went up. Historically would go up 27,500 dollars in the first year for $500. There's no worlds to get that return, isn't that, nuts folks? And you're already living in it too. You're using it.

Speaker 1: 23:47

Yes. Now here's the thing here's some caveats that we need to explain is this buyer does need to be in a position to come up with the earnest money. That is the one thing that some buyers that need DPA or down payment assistant programs do struggle with. To that is sometimes the biggest barrier to entry. I find with clients that come to us that need down payment assistance or need help where they're like hey, how do I get in a home with next to nothing? You know well, this is the, this is not. There's not really a workaround to it, you know.

Speaker 2: 24:24

And I also want to. I want to stop and make a point of. This can sound very 2080, oh my gosh, I'm getting a house for no money down You're, we qualify you for this loan. There are credit score requirements. There are debt and income ratio requirements. You are able to afford this house the same way you're able to afford a normal 30 year fixed mortgage. It's an FHA loan, so it's very conservative.

Speaker 2: 24:46

All we're doing is saying, hey, it's really hard to save up this amount of money, and being able to have this amount of money doesn't necessarily speak to your credit worthiness. Right, it's difficult to save up 50, 100, $150,000, whatever somebody needs. And while you're doing that, the housing market is outpacing you Because, say you know, 5.09% average appreciation, historical appreciation in Pierce County that $500,000 house becomes $525,000 the next year. Right Now, you have to have saved up 20% of 500 plus another 20% of the 25,000 that could continue to its 5% next year. Exactly, it continues. So we're not saying that, hey, everybody gets a house. We're saying that don't let lack of a down payment stop you from seeing if owning a home is right for you. There are tons of advantages.

Speaker 1: 25:38

Exactly, Exactly, and I think that's the largest takeaway is you're still. These down payment assistant programs are rewarding people that have put themselves in a financial situation where their credit worthiness, they can get pre-approved for the home. But they just need the help up front for some of the upfront costs. But they've been approved to be able to take on the burden of the monthly payments. They've been approved for it. They can. You guys have checked them, you know. It's like Brian's like oh, they're good, Don't worry, we've sent them through underwriting. There's a person in the back, they're cleared, you know, I mean, which actually brings me to a point I wanted to. I want to show you this, Brian, I'm pretty sure it's probably, would you say. The experience that a client goes through to get pre-approved through your process is a lot like this.

Speaker 2: 26:37

Prove Timeline Screenshot Everything.

Speaker 1: 26:46

Whoa, okay, I lost Brian folks. I do not know where he went. I will keep talking until he comes back. Oh, here he is. I'm going to add him to the stage once he comes back on. Until he does, though, I'm waiting for him. Let's see. Here, there we go, hey, dude, I'm so sorry.

Speaker 2: 27:09

Of course, that's what went down. I didn't see anything, so you know what we're going to cut everyone back to one and and action.

Speaker 1: 27:20

Everyone's like what's this joke? It didn't even land. Okay, you ready? So my question was was the process of people going through the pre-approval process with you a lot like this?

Speaker 2: 27:32

Prove Timeline Screenshot, everything. I want that so bad, yeah, yeah, look. Yes, let's talk about this too. Since we're talking about zero down home loans, we're going to talk a little bit about the mortgage process. Right now, people think that you know we talked about this in a few weeks ago how this market is not similar to 2008. I want to show you guys a slide of what I mean, because I'm me, so I have data for it and that's what I love.

Speaker 2: 28:07

But I got to find it first, and then we're going to talk about the ability to qualify for a home loan. Right now, there is no no in lending. In 2008, there was only yeses In 2024, there is a hey, not quite yet. Here's what we have to do to get qualified Exactly. You don't know what it takes to get qualified until you try to get qualified, and so we're asking you to do something that we haven't even prepared you to do, which, if you're watching this podcast, if you're listening on the live stream, you have the sort of interest and are finding the right places to learn about what this is. But I want to show you, of course, now I can't find it because I'm on the spot and I'm looking for it. Okay, here it is it's okay.

Speaker 1: 28:48

What oh you found it Okay.

Speaker 2: 28:50

Yeah, I found it. Now I got to present this is going to blow your guys' minds, I'm sure of it.

Speaker 1: 28:59

I can't wait for my mind to be blown.

Speaker 2: 29:02

You all ready for this? Bum, bum, bum, bum, bum, bum, bum, bum, bum. All right, so what we're looking at?

Speaker 1: 29:10

You have the ability to put it up right, I don't have to.

Speaker 2: 29:13

Nope, you got to, I can share it, and you got to put it up.

Speaker 1: 29:15

Oh, I have to. Okay, we're still learning the kinks of our story on platform that Brandon and I are doing. So, okay, perfect All right.

Speaker 2: 29:22

So, as we look at the use of adjusted rate mortgages and what makes housing markets more or less vulnerable to rates rising or going down, look at where the United States is in comparison to the rest of the world. So we have the most conservative underwriting standards in the world, which is look how far out Canada is.

Speaker 2: 29:49

I know right, canada has much different lending standards, which you and I have talked about a bit. Yeah, and that is, and yeah, that's. They work a lot like our commercial loan business, which can be another show, but we have super conservative lending standards. So if we're talking today about zero down home loans and saying, hey, you can house hack and you can get in a house for $500 earnest money, this is not the 2006, 2007, 2008 version of that. You have to be able to verify your income. We're going to verify your credit.

Speaker 2: 30:22

We're going to, we're going to run you through the ringer and give you a conservative 30 year fixed share mortgage because we want you to be able to afford this house and not be one of the people in 2005, 2006, that were the amount of people who were foreclosing or declare bankruptcy increasing dramatically before the fall.

Speaker 2: 30:42

We wanted you to stay down here, but the amount of make up season four closures are negligible and people are in the most conservative sort of mortgage they can have. Also, another point to make we can stop sharing now. Another point to make is we are in not only are we in the most conservative housing market like a mortgage market available. I forget the point I was going to make because now my virtual background is gone, you guys are seeing my construction zone, so my house is currently under construction, so I'm working in a corner of it, that's at any rate. You have to qualify for these mortgages and we are going to qualify you so that we are positive that you're able to pay back this mortgage in a way that is comfortable for you.

Speaker 1: 31:32

Yeah, exactly, and I think the whole point again and we've hit this home on every single livestream that we've done. But it's never too early to talk to a mortgage lender to get a baseline of where you need to be, because you'll never know if you don't talk to us and we are the type of folks that want to get you on a game plan on the longterm. So if you have no idea when you'll ever be able to buy a home, if you never look into it, you're just going to be in the same spot next year. Like, reach out to us so we can at least establish what that will look like for you and how soon we can get you into the timeline and we can.

Speaker 1: 32:17

If the answer is you can't get pre-approved yet, we can give you the clear, actionable steps you need to take to get you to where you need to be. We give you the entire package to make an informed decision on if now's a good time or not. Because some clients we can even get them pre-approved, but we might find out that the pre-approval amount is not indicative of what, it's not realistic to what the market has for pricing, and that's fine. But at least we found that out through. I wouldn't be able to find that out without getting the pre-approval done through, brian, like I, have no idea.

Speaker 1: 32:59

When clients are like oh, I think I'm just generally looking at houses that are between 400,000 to a million, like you know, like there's no. Or when people are like my budget's 500,000, it's like, well, how did you come up with that? Where'd you get?

Speaker 2: 33:12

that. Yeah, there's a few things that happen when people don't get pre-approved, because really it's just a fact-finding mission pre-approval we're just doing math and see what you're comfortable with what happens. What we find happens when people are not pre-approved and they go out and look at homes is one option. One is they're looking way above their actual budget. So when they do get pre-approved they're like man, either I can't spend that much money or I don't want to spend that much money because this is what it correlates to for monthly payment.

Speaker 2: 33:35

And so then every other house they look at they're heartbroken about because they're comparing it to a dream house. Or before they get pre-approved, they're looking well below their price range. And then they kind of get fatigued because they think, well, nothing out here really suits my needs, when if they would have gotten pre-approved, they were like, actually I'm comfortable $200,000 above this price point. Why am I looking at a house that's not gonna suit my needs when I can find one that does suit my needs that's affordable? Those two things happen when people are approved. The worst case scenario is they find a house, they fall in love with it and they realize they're not mortgage ready yet and that's gonna take them a month, six months, a year to get mortgage ready and they fall in love with that house. We're only setting ourselves up for failure when that happens.

Speaker 1: 34:15

Yeah, I completely agree. So I think really it's always a good idea to establish the baseline. And if you're just worried about what do you do if you get a no, well, I mean, there's a little bit of effort involved to turn in paperwork and stuff. But if you're motivated to buy a home, we're motivated to help you get there and figure out what the steps are, and we're gonna be the team that checks in with you and follows up to make sure that happens. I can't tell you how many clients that I've had. I've been doing this for 10 years. I even have I should throw it up on that. It's not one of my video testimonies, by the way. I'm gonna throw this shameless plug. Here's my. You guys could go to my YouTube channel and it's actually linked in the comments below this.

Speaker 1: 35:15

This is the 21 video testimonials in here that you can go check out. These are real stories from real clients, either buyers or home sellers or a lot of the sellers, though, are home sellers and buyers, so this is like gonna be really like, because most sellers also are looking to buy. So listen to their stories here. All of them have been through, are gonna be going through similar situations that you are.

Speaker 1: 35:45

I have dealt with similar, different markets that we've gone through in the last 10 year cycles that I've been working with these clients, and what I was gonna mention is I have a written testimonial from Zillow that I'll share with you guys, but this story from this client is I met them off of Facebook. I meet a lot of my clients off of social media LinkedIn, facebook, instagram, whatever clapper and anyways and we got them connected to a lender. They weren't ready yet and I kept in touch with them. It took four years before they were ready to be able to purchase a house, and we kept checking in every 90 days to six months, and we just kept that process going, and they were just shocked that we never lost touch and we made it happen, and God went home.

Speaker 2: 36:53

People felt commoditized by our industries real estate and lending oh, if I can't buy a house now, I don't wanna waste our time. Or they only care about a deal, they only care about a commission. And the reality is, the best of us are in this because we absolutely love helping people and we love helping people in this way and when somebody is so like, they're just astounded that, erin, oh my gosh, you've been staying in touch with us for four years. I can't believe that. And to you you're just like, of course I have, like I wanna be of assistance to you, I wanna be an asset to you, I wanna help you become whatever version of you you wanna be. Of course I'm in touch, but that is unfortunately.

Speaker 1: 37:29

Our two industries have earned the reputation for that to be surprising and to us Well, yeah, and it's cause a lot of realtors and lenders go after the now business. They're chasing that. Who's ready now? And really that's not where the majority I mean statistics show not everyone. The vast majority of people aren't gonna buy or sell this year.

Speaker 2: 37:52

How many of you guys watching here, on whatever platform you're watching on, are like today I had the thought I'm gonna buy a house, and so today I buy a house. It doesn't happen that way.

Speaker 1: 38:01

No, it's a long it's. It's a long term. So we meet you where you are. You're either Renting right now or you are a homeowner and you are not going to either buy or sell, for probably I mean statistically You're gonna probably do it within the next seven years. Is when you're gonna do it. I'm. So I'm meeting you somewhere in your journey. Yeah, within your next seven-year time frame. You might do it in the next six months, you might be doing it in the next year, you might be doing in the next four years, two years, three years, whatever. It might be seven years out, but you're probably doing it within the next seven years, statistically, on the national average. So I'm here to meet you wherever you're at in your journey.

Speaker 1: 38:48

Brian is too, and that's that's where. That's where that's where this is that. So again, dpa programs, down payment assistance programs they exist, but USDA programs, to close out, that's a little bit different, because the USDA home loan, unlike a down payment assistance program, is a. Well, I should not over talk about the USDA home loan, because I'm Linda, I want Brian, I'm just gonna say it's an awesome loan and I'm gonna let Brian talk about it for a minute.

Speaker 2: 39:23

I were gonna put this in a nutshell. A USDA loan is a zero down loan without dumping the assistance. It's 100% financing, similar to a VA loan. It is both income restricted, which means you, depending on where you're buying and how big your household is, you can't make over a certain amount. There are a lot of caveats to how we can bring that number down for you, but we're not gonna go to all those. We'll go in. Specifically, if you want to use the alone and it is Geographically restricted, you have to buy in a USDA geographically accepted Area and I'm gonna have Aaron. I'm gonna send Aaron so you can put in the comments or in the show notes or wherever he wants to put it how you can look up for yourself Whether or not at the home that you're interested in qualifies geographically for a UST alone and how you can find out for yourself If you qualify, if your income level qualifies, if you make too much money, doesn't matter if it's in a USDA approved.

Speaker 1: 40:19

Area you make too much money.

Speaker 2: 40:20

You're not to look at a different sort of loan, but if you fit within their income requirements and you fit within the geographic room into the house that you want, awesome, let's look into it. There are a million other caveats to what a USDA loan is and who it qualifies and what doesn't qualify. You don't have to worry about that on a podcast. Just know that it is available, that you can get 100% financing. It is Normally below market rates. When compared to FHA and conventional loans, the rates are really good because it's insured by the USDA, but the Department of Agriculture, excuse me so it's an insured, government insured loan and so the rates are normally lower.

Speaker 2: 40:54

It's got to be in a the census track of 20,000 or less, but there's a lot of places that have been grandfathered into that that are larger than 20,000. So, aaron, link available so you can look up a specific house and see if it's qualified and your specific income level to see if you qualify for it too. It's a great, great, great product if you can fit into that box.

Speaker 1: 41:16

I will also link a video that I made that was a quick walkthrough on how to find out Areas that qualify for USDA as well. Yeah, so awesome, yeah, fantastic. Well, brian, again thanks for coming on every Friday. Ish, you know it's been every Friday ish. Yeah, yeah, except for it. Well, even yeah, or one week off, but that was scheduled, so Sounds good. Guys, thanks for joining us whenever you could. We're all and take off. We'll see you on next week's. We'll figure out what we're gonna talk about.

Speaker 2: 41:48

Maybe house hacking.

Speaker 1: 41:50

Yeah.

Speaker 2: 41:51

Yeah, we'll see.

Speaker 1: 41:52

Yeah, we'll see. Thanks guys, I appreciate you. Yeah, great job everyone, and Come by Next time. Until next time again. Quick reminder Eramaro, brian Laflame, local Seattle realtor here greater Seattle area, king Pierce in Homish County. Brian, all over Washington State. So I'm Washingtonian, yeah, washingtonian. See you till next time.