"On average, 35% of declined loans could have been funded if the borrower had been matched with an appropriate down payment assistance (DPA) program. This figure is two percentage points higher than our published results from three years ago."
"Each decline was categorized by primary reason: credit, employment, property issues, debt-to-income ratio (DTI) and cash-to-close. The analysis focused specifically on loans denied for DTI or cash-to-close constraints, since these borrowers otherwise demonstrated mortgage readiness."
"In total, that represented approximately $1.8 billion in potentially recoverable loan volume. Even more notable was the average assistance amount per eligible borrower: nearly $27,000."
Declined loans represent significant losses for mortgage lenders. In Q3 2025, independent mortgage banks reported a pre-tax net production profit increase. An analysis of $6.5 billion in declined loans revealed that 35% could have been funded with down payment assistance programs. This figure is higher than previous studies. The analysis categorized declines by reasons such as credit and debt-to-income ratio. Over one-third of declined loans were salvageable, representing approximately $1.8 billion in recoverable volume, with an average assistance amount of nearly $27,000 per eligible borrower.
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