Silverton Mortgage has rolled out a series of mortgages that feature 100% financing in light of ongoing affordability woes.
Some of the loan programs rely on down payment assistance via a second mortgage that can cover both closing costs and the down payment.
These options are available on conventional loans and FHA loans, complementing other zero down options already available via the VA and USDA.
As home prices continue to move higher, mortgage lenders are increasingly looking for options to keep homeownership in reach.
They join several other banks and lenders that have recently launched zero down options for home buyers.
Silverton’s Conventional Program with Down Payment Assistance
While home loans backed by Fannie Mae and Freddie Mac typically require at least a 3% down payment, Silverton Mortgage has a solution to offer 100% financing.
Their “Conventional Program with down payment assistance” features a conforming mortgage loan set at 97% combined with a second mortgage.
The second mortgage can be used for a down payment and/or toward closing costs.
Together, these two loans can provide 100% financing to help prospective home buyers get into a new property with little or nothing out of pocket.
It is available in 32 states throughout the nation (Silverton does business in 45 states).
In September, San Antonio-based Frost Bank re-entered the mortgage biz with its Progress Mortgage, a zero down conventional loan that doesn’t require mortgage insurance (PMI).
A month earlier, Zillow Home Loans began piloting a 1% down mortgage via the use of a 2% grant for a 97% LTV mortgage.
Many others have also rolled out 1% down loans, including Guaranteed Rate OneDown, Guild Mortgage’s 1% Down Payment Advantage, and Rocket Mortgage One+.
You can even get a 1% down conventional loan via mortgage brokers thanks to a recent offering from the nation’s top lender, United Wholesale Mortgage.
Silverton’s FHA Program with Down Payment Assistance
The company has concurrently launched an FHA loan option with down payment assistance that achieves the same result.
Instead of requiring a 3.5% down payment, which is the minimum for an FHA loan, they combine a first mortgage with a second, known as a combo loan.
Together, the two loans can allow up to 100% financing, and even cover any closing costs the borrower may have.
It comes in two different options, one forgivable (if certain conditions are met) and one repayable.
This means the borrower may not even have to pay back the second mortgage in some cases.
It’s available in all 45 states where Silverton Mortgage is currently licensed.
Last month, loanDepot launched accessZERO, which also features an FHA loan with no money down.
Silverton Mortgage’s Community Lending Options
Aside from these two programs, Silverton also offers down payment assistance programs in eight states via its community lending team.
These specialty programs are accessible via state, county, and city housing authorities.
Other than featuring a low or no down payment, they also include flexible underwriting guidelines that could make it easier to qualify for a home loan.
They are available in Alabama, Florida, Georgia, Indiana, North Carolina, Ohio, South Carolina, and Tennessee.
On top of these options, Silverton also offers both VA loans and USDA loans, which allow for 100% financing without the need for a second mortgage.
Silverton also notes that “many” who obtain a VA loan through the company won’t have to pay lender fees.
The big question is if borrowers will still be able to qualify DTI-wise, as monthly payments are still quite pricey, especially at 100% financing.
Sure, you don’t need to come to the closing table with a large down payment, but what do the payments look like on two mortgages instead of one?
The good news is mortgage rates have retreated about one percentage point since hitting 20-year highs back in October.
If they continue to trend lower, existing home sales should pick back up. Speaking of, pending sales hit a new record low in October, per NAR, which has tracked the metric since 2001.
This made sense because mortgage rates also peaked during the month and were nearly the highest they’ve been this century.
Ideally it marks a bottom for existing sales, which have suffered due to a lack of resale inventory and high mortgage rates, which has also caused mortgage rate lock-in.
Silverton Mortgage, founded in 1998, is based out of Atlanta, Georgia.