The DREAM Fund is one of LCD Group’s most innovative home loan programs. It’s also one of the most popular. LCD Group Housing Director Lisa Pogatshnik answers some common questions about the DREAM Fund.
What is the DREAM Fund?
The DREAM Fund is designed to provide assistance to prospective home buyers and homeowners that traditional lending programs cannot accommodate.
The program provides assistance to help borrowers with a down payment and closing costs, rehabilitate homes, emergency repairs, or fill in affordability gaps. The DREAM Fund can also help with other housing related loans such as construction bridge loans and overcome lending barriers such as appraisal gaps.
What everyone needs to understand is the DREAM Fund does not take the place of traditional home loans. Instead, we work with lenders. We don’t compete with them. That’s important. Borrowers must go through their banks or credit unions before they use the DREAM Fund.
The reason for this is simple. The DREAM Fund is designed to both meet gaps but to also share the risk with home loan lenders.
Why do lenders like working with the DREAM Fund?
The short answer is simplicity. We have developed the process to be as simple and straight-forward as possible. I can tell you that lenders really appreciate this. Borrowers do as well but lenders are always flooded with paperwork so they really like the simplicity of the process.
Our easy process helps get borrowers into their homes or keeps them in their homes while dealing with unexpected emergency repairs.
It really is a win-win for the lender and the borrower.
What advantages does the DREAM Fund provide for borrowers?
There are really two major advantages for borrowers. First, the DREAM Fund allows people to keep more money in their pocket for the unexpected purchases that comes with new homeownership. The second major advantage is the fund allows them to stay in their home during emergency repairs.
How much did the DREAM Fund loan out in in 2022?
Last year, we approved $732,552 in DREAM Fund loans. We loaned $2.6 million over the last three years. Demand for the DREAM Fund skyrocketed during the COVID pandemic.
In many ways, 2020 was a weird year. People were staying home and noticed things they wanted to change in their homes. Being cooped up made people want to rehabilitate, remodel, or look for something new. Of course, really low interest rates helped fuel all of this.
But even in 2021, which was more a normal year compared to 2020, we closed on 44 DREAM Fund loans totaling almost one million dollars. Inflation is having some effect but demand for the program is still very strong.
What are some DREAM Fund success stories?
We’ve had several success stories but because they involve individual borrowers, we don’t share names. I know people often read success stories for LCDGroup’s commercial clients because we can shine a spotlight on them. We are limited in the information we can share about DREAM Fund clients and this is a good thing. We have to protect borrower confidentiality. But on the other hand it doesn’t always get the attention as some of our other programs but those who know, know what a great program it is.
In addition to the many new homeowners we have served, many of them young, I can share two stories that have really touched me. The first is we were able to help an elderly borrower fix a crumbling basement wall. Without the DREAM Fund, this borrower would not have been able to finance the repairs and would have had to move out of her home.
A second favorite success story is we were able to help a family modify a new home to accommodate their daughter who uses a wheelchair. We worked with the family’s lender, First International Bank & Trust, to secure 100 percent financing to give them a home that provided their daughter with dignity and independence.
Successes like those are why I love my job and love the DREAM Fund.
Learn More: Click here to learn more about the DREAM Fund. Feel free to contact Lisa Pogatshnik at (701) 667-7603 or at lisa@lcdgroup.org.