In talking recently with real estate professionals (REPs) near where I live in Long Island, I heard their frustration at seeing clients lose homes to competing bids coming in at $20,000 to $30,000 over the asking price. What can we do realistically, they asked me?

I empathized, having grappled with this problem during my 10 years as an agent in the same metro area. And now as team lead of Freddie Mac's outreach to REPs, I meet weekly with agents, determined to help them grow their business and get clients into homes they can afford. Fortunately, there are resources out there—accessible through lenders, state and local groups—that can help them and you with your clients to clear the affordability obstacle.

Here are three things you should do to increase your odds of success:

1. Have a Network of Trusted Lenders with Down Payment Assistance Programs

Some lenders may assist borrowers in clearing the affordability hurdle if they earn less than the area median income (AMI), among other factors. Benefits of having a network of trusted lenders  include:

  • Grants to help with closing costs, including title insurance, recording fees and appraisals. A borrower also may be able to buy discount points with this money to lower their rate.
  • Cash toward a down payment— up to $10,000 or 3% of the purchase price, whichever is less. This type of assistance is generally limited to specific geographic areas.

If you don't work with lenders offering these programs, reach out to one, set up a face-to-face (or virtual) meeting and familiarize yourself with their offerings. It brings a level of formality to your request and subtly conveys respect for a professional’s time and knowledge, increasing the odds he or she will recognize and be more willing to work harder for your clients in the future.

2. Partner with a Community Housing Counselor

A relationship with a housing counselor opens the door to early homebuyer education for your clients to prepare them to purchase and become responsible and sustainable homeowners in their communities.

In my case, I befriended and earned the trust of a director at Community Development Corporation of Long Island, which led to me speaking as a realtor at her group’s homebuyer education workshops. I spoke twice a month for over a year to a class of eight to 10 people, gaining clients and the help of the group’s counselors. If you don’t know counselors in your area, reach out to HUD-approved community housing counselors. Don’t hesitate to refer clients to a counselor but stay in touch with them as they go through the homebuyer education process. The counselor isn’t looking to take your client away from you but be a source of grants to reduce a borrower’s costs.

3. Make Connections at Your State’s Housing Finance Agency (HFA)

Cultivate a relationship at your state’s housing finance agency, or HFA, which gives borrowers grants to cover down payments and closing costs. The HFA will give you list of lenders that offer its specific affordable loan product. If a lender you like to partner with isn’t on the list, you can connect the lender with the agency to be able to make these loans, which can be paired with a down payment mortgage requiring only 3% down.

Know that HFA borrower eligibility definitions vary by state. For example, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) deems a first-time buyer as someone who is either buying their first home or hasn’t owned one in the last three years. But it makes an exception for qualified veterans or purchasing in an urban target area, where it wants to increase affordable housing.

Playing the Long Game

As a real estate agent, you must make the tradeoff between the opportunity cost of using your time today in a bid to win more future business. However, you can’t afford not to do these three things because of the upside they provide. It could make the difference between handing the keys to future client or hanging up the phone after telling them you’re out of ideas.

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