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The Yahoo view: Because of its commitment to underserved borrowers, New American Funding is a strong option for first-time home buyers. NAF has a variety of innovative loan programs and a “cash buyer” program for competitive housing markets.
With a deep bench of loan products, New American Funding earns our highest score for affordability — a Yahoo Finance measure of mortgage options and accessibility. However, their offerings regarding home equity loan products are unclear.
Dig deeper: Everything you should know as a first-time home buyer
Key benefits
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The “Pathway to Homeownership” program targets first-time home buyers who need up to $8,000 in assistance for a down payment or closing costs. Additional requirements apply.
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A “cash buyer” program claims to offer a faster closing and possible savings on a home’s sale price. NAF makes a cash purchase of the house and sells it back to the borrower.
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NAF’s “I CAN” mortgage offers loan terms from eight to 30 years, which provides payment flexibility and a path to paying off your mortgage sooner.
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New American Funding offers the Latino Focus and NAF Black Impact initiatives to enhance lending to underserved communities.
Need to know
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Mortgage rates shown on NAF’s website seem pleasantly low but are reduced with three discount points and as much as a 40% down payment, which is only revealed when clicking through to advertising disclosures on a separate page.
Visit New American Funding’s website to get started.
New American funding offers the following types of home loans:
New American funding does not offer the following types of home loans:
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Lot loans
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Second home loans
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Investment property loans
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Energy efficient mortgages
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1% down payment mortgages
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Bridge loans
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Manufactured home mortgages
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Piggy-back loans
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ITIN mortgages
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Medical professional loans
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Home equity loans
Learn more: Want to build an accessible dwelling unit (ADU)? Here’s how to finance it.
Loans backed by the Federal Housing Administration are a significant part of New American Funding’s business. It sits just outside the top 10 in FHA loan volume, according to 2023 HMDA data.
The FHA loan page on NAF’s website lists the loan options available in this government-backed mortgage and the benefits of each. However, like many of its loan product pages, the information is generic and doesn’t specify NAF’s FHA loan specifications. Instead, it leans on phrases such as “some lenders may accept” and similar vagueness.
However, if you are new to FHA loans, this page will give you a general sense of what to expect.
Learn more: The best FHA loan lenders
NAF has a confusing presentation of its home equity offers. An issue we noticed nearly a year ago still seems to linger. We still can’t say definitively what New American Funding offers in the home equity lending category other than a cash-out refinance.
While NAF has an entire page dedicated to home equity lines of credit, we found it odd that the language regarding qualifying for a HELOC made generic references such as “check with your mortgage lender” and “most lenders” rather than referring to New American Funding.
When clicking on “Home Equity Loan” in the HELOC Alternatives section of the HELOC page, New American Funding offers an article comparing a HELOC to a HEL.
Clicking on “Apply Now” on the home equity loan page took us to a choice of “Buy a Home,” “Refinance,” or “Cash Out.” That’s confusing because a home equity loan is not refinancing your loan; it’s a second mortgage that allows you to draw from your home’s equity as a lump sum. And it’s unclear if “cash out” leads to an application for a HELOC, a HEL, or a cash-out refinance.
New American Funding HELOC and home equity loan fees
With little definitive information on NAF’s home equity second mortgages, it’s no wonder we couldn’t find any fee information for such a product.
Dig deeper: The differences between HELOCs and home equity loans
The Today’s Mortgage Rates page on the NAF website features four common loan rates: 30- and 15-year fixed and 30-year fixed FHA and VA loans.
As noted above, the rates are lowered with three discount points and 40% down payments. Oof. That will set many borrowers up for a big disappointment when they find out the rate they truly qualify for.
Read more: How to get the lowest mortgage rates
Yahoo Finance uses 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications to score mortgage lenders on issued mortgage rates and total loan costs. We score each lender on a scale of 1 (lowest) to 5 (highest).
For example, regarding mortgage rates, a lender with a lower score charged a higher-than-median mortgage interest rate for loans issued in 2023. A higher score would indicate that a lender granted lower-than-median home loan interest rates to borrowers in 2023.
With total home loan costs, a lower score would indicate that a lender charged higher than median total home loan costs in 2023. A high rating would mean that a mortgage lender offered lower than median all-in home loan costs in 2023.
What this means: New American Funding offered a higher-than-median mortgage rate of 6.57% and a higher-than-median total loan cost of $9,038 to borrowers in 2023.
As with all lenders these days, NAF offers many ways to enter the application flow online.
Clicking on “apply,” “rate quote,” or “get quote” leads you to what looks to be a four-step screening process where you choose to “buy a home,” “refinance,” or “cash out.” Submitting the property information and some loan details will take “about 3 minutes,” NAF says.
The short process and the fact that NAF says it doesn’t affect your credit score make us believe this is simply a lead generator that will land you on the company’s email or callback list. A loan application — even a prequalification — would likely take more time and information.
Dig deeper: How to get a mortgage
Home-buyer resources on the New American Funding website are plentiful and actionable. NAF’s first-time home buyer guide has some of the most specific information we’ve seen a lender offer.
Loan options and down payment assistance programs are explained, as well as the credit scores required to access such support.
The Learning Center on the NAF website is text-heavy but necessary information for first-timers looking to break into homeownership. With few graphics to break up the information, it may feel like a bit of a grind to get through it all, but a phone number is prominently displayed if you’d rather talk through your options with a mortgage rep.
There are plenty of home-buying resources, including:
You’ll also find mortgage payment, amortization, refinance, and affordability calculators.
And a bonus: state calculators that provide additional information, including property taxes, home and mortgage stats, and other costs and figures related to a particular state.
Learn more: Use Yahoo Finance’s free mortgage calculator
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New American Mortgage earns the highest rating (5 stars) in our Affordability category for an extensive menu of home loans.
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With a deep library of articles, videos, resources, and calculators, New American Funding earns 5 stars in our Online Features category.
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According to Yahoo Finance’s analysis of HMDA data, New American Funding falls short due to higher-than-median interest rates and loan costs.
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Because it lowers advertised rates with a stiff three discount points and 40% down payments, NAF gets 2 stars for a lack of rate transparency.
With its Pathway to Homeownership program, NAF offers up to $8,000 in down payment and closing costs assistance to first-time home buyers in certain areas. Chase Home Lending has a similar program offering grants of $2,500, $5,000, or up to $7,500 that can be applied to the down payment or fees, with certain restrictions.
Both programs are worthy of consideration. Comparing assistance programs can help you find the best road to homeownership and give you leverage when considering loan offers from competing mortgage lenders.
Chase mortgage review
New American Funding offers 3% down conventional loans. So does Rocket Mortgage. But Rocket takes it a step further and buys down the down payment to 1% with a 2% grant you never have to repay.
While it’s important to remember that you want to put down as much money as you can comfortably afford, it’s also good to have options.
Rocket Mortgage review
New American Funding is a privately held company based in Tustin, Calif., owned by husband-and-wife founders Rick and Patty Arvielo. It was founded in 2003 as a call center and opened its first mortgage loan center in 2012.
Yes. According to our analysis, New American Funding’s fees are on the high side. However, that doesn’t mean you should take them off your list of potential lenders. Shop multiple mortgage lenders and compare loan offers, including fees and your interest rate, side by side.
Credit score minimums can range from a FICO 500 for an FHA loan to a minimum of 620 for a conventional loan. New American Funding’s first-time homebuyer guide offers an overview of loan options and credit scores — as well as all-important debt-to-income ratio guidelines.
Methodology:
Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2023 Home Mortgage Disclosure Act data comprised of 10 million home loan applications, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.
Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.
Advertisers or sponsorships do not influence ratings.
Editorial disclosure for mortgages:
The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender’s website for the most current information. This site doesn’t include all currently available offers.
This article was edited by Laura Grace Tarpley.