One industry veteran suggests ways to change forever renters into homeowners
One of the biggest challenges for the mortgage industry as 2025 winds down is to find ways to get potential first-time homebuyers off the sidelines and into the market.
A recent Redfin survey noted that 45% of Americans were holding off on major purchases due to economic uncertainty. A softening jobs market is blamed for 33% of survey takers feeling uncertain about job security.
For loan originators, helping borrowers overcome that uncertainty and hesitation is one of their biggest challenges. One industry veteran suggested that two government loan products could be key to getting first-time buyers into homes.
Michael Brennan (pictured top) is the president of Nationwide Mortgage Bankers (NMB). He believes that FHA and VA streamline loan products could encourage consumers to buy now, with the ability to refinance at reduced cost when rates drop.
“The great thing about FHA or VAs is you can do streamlines,” Brennan told Mortgage Professional America. “So if you're a first-time homebuyer, you're going to get a house. If rates are 6.5% today, and say rates go down in four months to 5.75%, you can do a streamlined refinance. Looking at that strategy for first-time homebuyers would be great.
“And then obviously our VA, who are our ultimate heroes. With both of those loans, you can do a renovation. There's a VA renovation, and there's an FHA renovation. So there are so many opportunities.”
Earning equity in a home
Both the FHA and VA have specific rules about streamline and renovation loans, and originators should familiarize themselves with these before discussing them with customers.
But Brennan believes that, whether it's these types of loans or just conventional mortgage loans, it’s important to convey to potential first-time buyers the value of a home purchase and the value lost by delaying it.
“When it comes to purchase, there's only been depreciation three times in 80 years,” Brennan said. “Properties always go up, and there were usually pretty significant life things that happened for them to go down. So when somebody asked me, ‘Hey, when's a good time to buy?’ There's only one answer: that’s now, because you can't afford to wait.”
Whether it’s via a streamline loan through FHA or VA, or a conventional loan, with mortgage rates forecasted to fall in 2026, getting borrowers started earning equity is critical. Brennan reminds them that they can refinance when rates drop.
“Date the rate, marry the house, because the appreciation that you'll make over the life of the loan will outweigh the extra amount that you’re going to pay in the payment,” he said. “NAR just came out and said they're anticipating a 14% increase in purchase volume in 2026. I think we all know what that will potentially do to home values. You'll start seeing a little bit more appreciation.”
Affordability challenges
These potential first-time buyers who are hesitating to buy a home are spending a mortgage payment on rent every month. Brennan said he will send them an analysis showing what they’re missing out on by continuing to rent.
“I'll send a rent versus buy analysis to individuals who are current renters,” he said. “You’re paying a mortgage even if you’re renting. It’s just not your mortgage. The biggest challenge in our market right now is affordability for first-time homebuyers. They can't afford a $500,000 or $600,000 house with student debt and everything. So we need to make housing more affordable. That could be condos, townhomes, a first-time homebuyer program, and starter homes.”
Bruce Gehrke of JD Power says younger borrowers are approaching home buying with caution, factoring lifestyle costs alongside mortgage payments. He notes affordability challenges and market complexities are reshaping expectations for first-time buyers.https://t.co/rEAGOhjG8D
— Mortgage Professional America Magazine (@MPAMagazineUS) November 25, 2025
While brokers and loan originators are always optimistic about almost any housing market, Brennan said one of the most important things for potential buyers is to find that trusted advisor who can walk them through all the options before they decide to buy.
“I'm not saying go tomorrow and put an offer on a house,” Brennan said. “I tell them to get with a trusted advisor today and tell them what you’re looking to do. Maybe it's not for 3, 6 or 12 months, but if I can advise, or one of my team members can advise on what they need to do to prepare so they have money for a down payment. We're not selling anything. We're providing information. I would say, get rid of the noise. I like the market we're in right now.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
