Rocket Central‘s new vice president of public policy, Karan Kaul, plans to prioritize homeownership opportunities for first-time homebuyers, households of color, low- and moderate-income households that have historically found it difficult to access mortgage credit.
As such, Rocket will continue to offer its special purpose credit programs, which allow first-time homebuyers to receive funds toward their down payment and help improve affordability, Kaul said in an interview with HousingWire.
“Down payment is one of the key barriers to homeownership for a lot of families,” Kaul said. “So these special purpose credit programs really help us allow these folks to afford their homes, not just with respect to the monthly payment, but with respect to the required down payment, which many families lack — especially given how high house prices are today.”
The Detroit-headquartered lender’s first special-purpose credit program debuted in December 2022. Dubbed “Purchase Plus,” the initiative provides $7,500 in credits for first-time homebuyers to use toward their mortgage costs in six major cities, including Atlanta, Baltimore and Chicago.
In March, Rocket expanded its special-purpose credit program to offer Freddie Mac‘s BorrowSmart Access program, which provides a $3,000 credit for first-time homebuyers to use toward their downpayment.
The program is available for buyers who met the requirements and are purchasing a home in countries across 10 metropolitan areas. To qualify, borrowers must have an income equal to or less than 140% of the area median income (AMI) and meet all other Freddie Mac lending guidelines.
The BorrowSmart Access can also be used with Freddie Mac’s 3% downpayment product, as well as other borrower assistance programs, like closing assistance.
Looking for creative ways to reduce the cost of homeownership will be the focus of the position, Kaul emphasized, noting Rocket Mortgage and its wholesale arm Rocket PRO TPO’s Inflation Buster program.
Launched in September 2022, Rocket Mortgage’s Inflation Buster, which ended on March 31, covered the difference in mortgage payments in the first 12 months through a special escrow. For Rocket Pro TPO, home sellers or real estate agents funded the program for borrowers.
“We’re always looking at product innovations, new innovative products that we could be offering, working with the government-sponsored enterprises (GSEs) and other stakeholders in the housing finance ecosystem to really discuss and talk about what else we could be doing,” Kaul said.
Kaul brings to the role at Rocket more than 13 years of experience in the mortgage servicing space, mortgage finance system and housing finance reform. He was most recently a lead researcher of mortgage servicing collaborative at the Urban Institute and is a former corporate strategy manager at Freddie Mac.
