New American Funding review 2023

New American Funding is a mortgage lender that offers a wide variety of loan programs, including custom-term mortgages and non-QM loans — a type of loan for self-employed professionals, freelancers, contractors, and small business owners.

Are you considering using New American Funding for your home purchase or refinance? Here’s what you need to know to determine if it’s the right mortgage lender for you.

Conventional loans: New American Funding offers both fixed and adjustable-rate conventional mortgages. You can choose the standard 15- and 30-year terms or, if you want something in between, opt for the lender’s “I CAN” mortgage, which lets you customize your loan’s term anywhere from eight to 30 years. New American Funding’s adjustable-rate mortgages come in 5/1, 5/6, 7/1, 7/6, 10/1, and 10/6 terms.

USDA loans: You can also get USDA loans — mortgages backed by the U.S. Department of Agriculture — at New American Funding. These don’t have any down payment requirements and are only for use on home purchases in rural (and some suburban) parts of the country.

FHA loans: New American Funding’s FHA loans, which are guaranteed by the Federal Housing Administration, require just a 3.5% down payment. They can be good for first-time buyers or borrowers with lower credit scores. New American Funding also offers FHA 203k loans, which allow you to buy a fixer-upper and roll the costs of its renovations into your loan balance.

VA loans: For borrowers who are active-duty military members, veterans, or the spouse of a veteran/military member, New American Funding offers VA loans. These are mortgages backed by the Department of Veterans Affairs. They require no down payment. 

Jumbo loans: New American Funding’s jumbo loans let you borrow more than the Federal Housing Finance Agency’s limit. With these, you can borrow up to $5 million.

Construction loans: If you’re looking to build a home, you can use New American Funding’s construction loans. These let you finance the actual construction of your home, and then turn those costs into a long-term, fixed-rate mortgage once you move into the home. There is just one closing on these loans.

Non-QM loan: Non-QM loans — or “non-qualified mortgage” loans — are for borrowers with non-traditional income. They allow self-employed professionals, entrepreneurs, freelancers, and other similar workers to qualify without tax returns, W-2s, or paystubs. 

HELOCs: If you’re already a homeowner, you might consider New American Funding’s home equity lines of credit — or HELOCs. These turn your equity into cash, which you can then use to pay for home repairs or any other costs you might be facing.

Reverse mortgages: Reverse mortgages pay you out of your home equity, giving you reliable monthly payments as long as you live in the home. They’re for senior homeowners only.

ADU loans: These are loans you can use to build or purchase Accessory Dwelling Units — guest houses, tiny homes, carriage houses, and so on. 

New American Funding’s rates are lower than national averages. The lender also offers a rate buydown program, which lets you reduce your rate for one to three years by one to three full percentage points (so you could potentially lower your rate from 7% to 4%, for example.) The buydowns are available on 15- and 30-year fixed-rate loans, FHA loans, and VA loans. Some adjustable-rate mortgages may also be eligible. 

The exact requirements for New American Funding’s mortgages depend on what loan program you’ve chosen. Its customizable I CAN mortgage requires a 620 credit score and a down payment of at least 5%. 

Borrowers with lower credit scores will want to consider the company’s FHA loans (these require a 580 score and a 3.5% down payment). USDA loans also allow for a 580 score but require no down payment. 

If you need a larger loan amount and choose a jumbo loan, you’ll need a 680 credit score and a 10% down payment or more. 

The biggest advantage to using New American Funding is the wide array of loan choices you have. The lender offers loan programs to fit virtually any type of borrower’s needs and budget, and there are even options for non-traditional income earners, too. 

New American Funding also offers low rates, and its customizable I CAN loan makes it easy to find a term that fits your monthly budgeting needs.

On the downside, New American Funding’s physical locations are limited, and it doesn’t issue loans in Hawaii. Its Trustpilot and Better Business Bureau ratings, while not poor, could be better. Nearly a third of customers on Trustpilot gave their experience one star out of five.  

You can complete New American Funding’s mortgage application online or in one of its physical branch locations, if there’s one in your area. Within 24 to 48 hours, you should get a preapproval letter, which will detail your estimated loan amount and loan type. 

Once you’ve closed on your loan, you can manage it — and contact the company — using New American’s customer care portal.

New American Funding could be a good fit if you’re looking for low mortgage rates, customizable terms, and a wide variety of loan options. If you have a low credit score or non-traditional income (you’re not salaried and don’t have a W-2), New American Funding can also be a smart choice.

On the other hand, New American is not right for Hawaiian borrowers, as it does not issue loans within the state. You also may want to look elsewhere if you don’t live near one of the lender’s locations yet still want an in-person experience.

New American Funding has its perks, but it’s not the only choice when it comes to banks and mortgage lenders. To ensure you get the best rate and loan for your needs, always compare at least a few mortgage companies before choosing a mortgage lender. Freddie Mac data shows that borrowers who get at least two rate quotes can save up to $600 per year, while four rate quotes could result in $1,200 savings.

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at [email protected].