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New American Funding Review 2022: Is This Lender Trustworthy?

New American Funding is a mortgage lender specializing in underserved markets. It offers mortgages and refinances with flexible terms and a special first-time homebuyer program.

NMLS#6606
8.5 / 10
Editorial Score
Ginny Dorn
Personal finance and mortgages specialist
June 14, 2022

Overview

New American Funding is a Freddie Mac, Fannie Mae, and Ginnie Mae direct lender. It provides conventional fixed and adjustable-rate mortgages, FHA loans, VA loans, buydown loans, and reverse mortgages. It also offers the I CAN Mortgage, which allows you to customize your loan term for anywhere between 8 and 30 years.

I appreciate how New American Funding makes diversity a key part of its mission. A couple of years back, 19% of its home purchase loan volume went to Hispanic homebuyers – beating the industry average of 8.5%. It also focuses on diversity in house, with 45% of its workforce being minorities and 59% being women.

With first-time homebuyer programs and manual underwriting capability, New American Funding may be able to help you find a mortgage loan even if you’re unqualified. It maintains an A+ score with the Better Business Bureau and a Great score with Trustpilot, making it a trustworthy company.

GREAT CHOICE 2022
8.5 / 10
Editorial Score
New American Funding
Quick view:
Editorial Score
8.5 / 10
Online Services
Applications, Quote management, etc.
8.0 / 10
Customer Service
9.5 / 10
Available in all states
9.0 / 10
Available loan types
9.0 / 10
Products
7.0 / 10

See Mortgage Offers from New American Funding

Products & Services

New American Funding offers many types of mortgage loans for both purchase and refinance. It also offers home equity lines of credit and jumbo loans, though availability varies and you’ll need to speak with a loan officer. These options are not advertised on the website for this reason.

Conventional Fixed-Rate Mortgage

With a 15 or 30-year fixed-rate mortgage, you’ll have the same interest rate throughout the life of the loan, unless you choose to refinance. This allows you to have a consistent monthly bill.

To qualify for a fixed-rate mortgage with New American Funding, you’ll need a credit score of at least 620 and a debt-to-income ratio of less than 43%. That means that the percentage of debt you pay each month is no more than 43% of your gross monthly income. To apply, you’ll need proof of income and asset information, including 401K and bank account statements.

Adjustable-Rate Mortgage (ARM)

An ARM is a variable rate mortgage, meaning that your interest rate can adjust on a monthly or yearly basis depending on the market. These loans typically have an initial period with a set interest rate before the rate can adjust. You can use this type of loan to purchase or refinance up to $484,350.

With New American Funding, you can get a 5-year ARM for conventional, FHA, or VA loans. You can also get a 7 or 10-year ARM for conventional and jumbo loans.

I CAN Mortgage

I CAN Mortgage is a special offering from New American Funding that allows you to choose your own term from 8 to 30 years. The lender provides you with a loan officer who can suggest a mortgage based on your financial goals and monthly budget. You can purchase or refinance up to $510,400.

This type of loan also allows you to refinance without signing on for another 15 or 30-year term. For example, if you were already 9 years into a 30-year term and wanted to refinance for a lower rate, you can get a 21-year term rather than restarting another 30-year term.

To get an I CAN Mortgage, you’ll need a FICO credit score of at least 620. It may only be used to purchase primary residences in single-family one-unit houses, townhouses, or condos. You’ll need a down payment of at least 5%.

See Mortgage Loan Offers from New American Funding

Buydown Loan

Buydown loans allow you to pay a one-time fee in order to get a temporary lower payment and lower interest rate at the start of the loan term. You might choose this type of loan in order to have extra funds for new appliances and upgrades to the home. Once the buydown term is over, you begin paying the full rate you received with your loan.

New American Funding offers three options:

  • A 1-0 buydown provides you with a 1% lower rate than your note rate for the first year of the loan term.
  • A 2-1 buydown gets you 2% lower than the note rate for the first year and 1% lower in the second year.
  • A 1-1-1 buydown will get you a 1% lower payment rate than the note rate for the first 3 years of the loan.

This lender offers buydown loans on 30-year fixed-rate purchases and refinances. It’s available for conventional, VA, or FHA loans and only available for primary residences.

Reverse Mortgage

The average mortgage lender doesn’t always offer reverse mortgages – but New American Funding does. This loan allows you to convert a portion of your home equity into cash. New American Funding will make monthly payments to you, rather than you paying them. You are not required to pay back the loan until you sell the home or vacate it. Meanwhile, you still retain ownership. If you pass away, your heirs or estate will need to pay off the loan.

There are no credit score minimums or required debt-to-income ratios. To qualify, you must be at least 62 years old and own the home outright or have a low enough balance on your mortgage that you can pay it off with the proceeds from the reverse mortgage. You must also qualify to pay and remain current on any costs associated with HOA, insurance, and taxes.

There are several fees to consider with this type of loan, including origination and servicing fees. You’ll also pay adjustable interest rates, 3rd party closing costs, mortgage insurance, and a monthly premium of 1.25% of the loan balance for the life of the loan.

See Mortgage Loan Offers from New American Funding

Rates and Terms

With New American Funding, you can get conventional loans and ARMs for 15 and 30-year terms. You can also take advantage of its I CAN Mortgage offering and choose a term between 8 and 30 years. The lender can service all states except for Hawaii.

New American Funding is currently advertising rates as low as 2.353% APR on 15-year fixed mortgages and 2.984% APR on 30-year fixed mortgages. However, these rates assume the use of 1.25% and 1% discount points respectively, with a 60% loan-to-value ratio and a credit score of 740. Your rates will vary depending on these factors.

This lender does not disclose fees online, so you won’t know what fees are required until you get an official quote. When I called to ask about fees, I was told that appraisal reports are currently ranging from $475 to $550 and underwriting fees are $1,219. However, the agent who spoke with me said that the market is constantly changing, which is why it doesn’t state fees online.

New American Funding does offer discount points, which you can purchase for an upfront fee to lower your interest rate. You can also take advantage of the lender’s first-time homebuyer program, which helps you find local and state assistance programs.

Application Process and Qualifications

You can apply for a loan with New American Funding online, by phone, or in person. You can upload documents online and sign by electronic signature. Even if you start the prequalification process online, you’ll still need to contact a loan officer directly before you can get a prequalification letter.

You’ll need to provide the following information during the prequalification stage:

  • Type of property
  • Purchase timeline
  • Purchase price
  • Down payment
  • Annual income

During application, you’ll need to provide proof of income, including past employment and income history. You’ll also need to provide asset information, including bank account statements and investment records, such as your 401K statements. You may also need to verify that you have adequate homeowner’s insurance coverage, depending on what type of loan you choose.

Conventional loans require a credit score of at least 620 and a down payment of at least 3%. You’ll also need a debt-to-income ratio of 43% or lower. Despite these restrictions, New American Funding is invested in making home loans available to everyone and even offers non-qualified mortgages.

The lender offers manual underwriting, which allows it to take a comprehensive look at someone’s application rather than using an all-automated approach, allowing it to approve more loans. That means if you’re self-employed or have a unique financial situation, you may still qualify. However, it’s important to note that these special circumstances may require a higher interest rate.

New American Funding offers tons of tools to assist you as you search for and choose a loan. You can take advantage of calculators, explanatory blog posts, and real estate trend information listed on its website. You can also utilize New American Funding’s mobile app if you choose to move forward with a loan, which can be used to make payments and track information about your home value.

Get Started with New American Funding

Approval Time

It takes just minutes to begin the process by filling out the online forms to get your quote. From there, you’ll work directly with a loan officer to complete your application and finalize your offer with an interest rate. Preapproval can take as little as 24 to 48 hours, while closing time can take 35 days. These timelines are on par with the market average.

Customer Service

New American Funding’s corporate customer service team is available via phone or email, from 8:00 a.m. to 9:00 p.m. Monday through Friday, and Saturday 10 a.m. to 2 p.m. CST. English/Spanish bilingual agents are available to help.

I tested the customer service team by sending the following email:

Customer Service

I received a response almost immediately, though they did not attempt to answer my question and instead referred me to a different department. This is a fair answer to my question, as fees can be complicated and vary with different circumstances.

Customer Service

When I called the number the customer service team provided, I was immediately connected with an operator who got my location and connected me with an agent in the area I said I wanted to purchase in. There was no waiting or hold time.

The agent who spoke with me was incredibly helpful and informative. I told her that I was just getting started and was researching lenders, looking to buy a home in a year or so. She asked for information regarding employment and credit score. From there, she was able to provide information about current fees, though she noted that they are changing as the market changes.

Overall, the agent who helped me was very friendly, knowledgeable, and clearly wanted to help me regardless of whether she was getting a sale from me. Even the operator who took my initial call was polite, kind, and quick to act.

Summary

New American Funding aims to serve a wide audience, with a variety of home loan options. It could be a good choice if you’re part of a minority group, have a unique financial situation, or are a first-time homebuyer. With manual underwriting capabilities and assistance programs, it is uniquely positioned to serve these groups.

Although you cannot complete the entire process online on your own, the personalized service you can receive from a loan officer via a phone call or in-person visit ensures that you are getting the best mortgage option for your circumstances.

However, it’s important to note that New American Funding does not disclose its fees online. Advertised interest rates are also padded with discount points and high credit scores, which means that you may qualify for higher rates depending on your financial circumstances.

Despite the drawbacks, this lender maintains an A+ score with the Better Business Bureau and has serviced over 214,000 loans for $56 billion in its 17 years of business. New American Funding is a trustworthy company that has a lengthy history and positive customer reviews to support its reputation as a great lender.

See Mortgage Loan Offers from New American Funding

FAQ:

What kind of company is New American Funding?

New American Funding is a privately-owned direct mortgage lender.

How long does New American Funding take?

You can get preapproved for a loan within as little as 24 to 48 hours. Closing on the loan can take about 35 days. Timelines depend on how prepared you are with required documentation.

Is New American Funding federally backed?

New American Funding sells and services Fannie Mae, Freddie Mac, and Ginnie Mae loans, which are federally backed. It also offers FHA and VA loans, both of which are backed by the government.

Is New American Funding a private company?

Yes, New American Funding is a private company.

Is New American Funding backed by Sallie Mae?

No. Sallie Mae is a student loan lender, while New American Funding provides home loans. However, it is a Fannie Mae, Freddie Mac, and Ginnie Mae direct mortgage lender.

Ginny Dorn
Written by

Ginny Dorn is a freelance personal finance writer. She specializes in credit card debt, personal loans, and mortgages. She graduated from Western Illinois University with a bachelor's degree in family and consumer sciences.

Pros:
  • Special focus on serving underserved borrowers
  • Flexible mortgage terms between 8 and 30 years
  • A wide variety of mortgage and refinance loan options
Cons:
  • Fees are not disclosed until you have a loan offer
  • Advertised rates are based on high credit and discount points
  • Mortgage rates are higher than the median
Bottom Line

New American Funding provides mortgage purchase and refinance loans. It could be a good choice if you’re a first-time homebuyer needing help finding assistance programs or if you’re in a unique financial situation and would benefit from manual underwriting. 

Since this lender specializes in harder-to-serve borrowers, its rates may be a bit higher than average. If you’re a standard borrower with good credit and money for a downpayment, you might find lower rates elsewhere. It doesn’t disclose fees until you have a loan offer. Despite the drawbacks, it has excellent ratings and billions in loan volume to support its reputation.