With Low Down Payments and Flexibility in Mortgage Approval Requirements, FHA Loans Are Ideal for First-Time Home Buyers and The 45 Million Americans with Student Loan Debt
NEW YORK–(BUSINESS WIRE)–March 25, 2019–
Better.com, a digital mortgage disruptor and one of the fastest growing home-financing companies in America, announced today that it is now offering government-backed FHA home loans to consumers through the company’s website, Better.com. Insured by the Federal Housing Administration (FHA), FHA-loans require lower minimum credit scores and down payments than many conventional loans, making them ideal for first-time home buyers and the 45 million Americans with student loan debt.
The news follows a report that found home ownership is not only on the rise, but primarily comprised of first-time home buyers: Millennials now surpass Generation X as the group that was responsible for the most new mortgages. Millennials also now make up 42 percent of all mortgage dollars originated in the U.S.
However, this demographic group has also found student loan debt to be a major barrier in the path to home ownership: nearly one-fifth of people with student debt who apply for traditional mortgages are denied because of their debt-to-income ratio, credit score and the ability to save for a down payment, affecting the potential buyers ability to qualify for a mortgage.
Currently 45 million people in the United States carry student debt and the average borrower owes more than $30,000; almost a fifth owe more than $100,000. Collectively, Americans owe an incredible $1.5 trillion on student loans, $521 billion more than the total U.S. credit card debt.
“Owning a home, the most conventional way Americans build wealth, can become a distant dream for millions crushed by student debt. Student loan payments make saving for a down payment more difficult and mortgage payments harder to handle once you’re a homeowner. With the roll out of Better.com’s FHA loan program, we’re able to make home ownership accessible to millions of Americans who would have otherwise been denied a mortgage. It felt unfair that anyone who graduated in the late 2000s and invested in their education should now be punished and prevented from buying a home and accessing the American dream. The launch of Better.com’s FHA loans is consistent with our ethos of expanding access and affordability to home ownership, and today we’re proud to move one big step forward in solving this issue,” said Vishal Garg, CEO and Founder of Better.com.
The announcement proceeds Better.com‘s close of $75 million in Series C funding from Citigroup, Goldman Sachs, American Express Ventures, Pine Brook, Kleiner Perkins, and the Healthcare of Ontario Pension Plan (HOOPP). In the last year, the fintech startup has hired 485 people, grown revenue 3x and moved their office to 7 World Trade Center. Better.com has also funded more than $2.6 billion in loans since its inception in 2016.
The company was recognized as one of Forbes FinTech 50 2018, and one of Crain’s Best Places to Work in New York City. For more information, please visit Better.com.
Backed by Citigroup, Goldman Sachs, American Express Ventures, Kleiner Perkins, Pine Brook and Healthcare of Ontario Pension Plan (HOOPP), Better.com is one of the fastest growing home finance disruptors in America, using machine learning and AI to digitize and automate every step of the home financing process to make homeownership more affordable and accessible. In the last year, the fintech startup grew revenue 3x and has funded more than $2.6 billion in loans since its inception in 2016.
For more information, follow @betterdotcom.