In a Nutshell: Purchasing a home is a tried-and-true strategy for increasing net worth and ultimately creating wealth families can pass on. But it’s hard to make the numbers work in today’s market of soaring home prices, high interest rates, and low inventory. Evergreen Home Loans works to change that in 11 predominantly Pacific Northwest states by creatively applying financial principles to make obtaining a mortgage more feasible. Through CashUp® and other products, Evergreen makes homeownership and the prospect of building generational wealth more attainable.
A home purchase is a significant financial responsibility that carries risk, but it’s worth it because the upsides can be life-changing. A mortgage builds personal net worth in the form of equity; the alternative is paying someone else’s mortgage in rent.
Homeownership is a cornerstone of the American Dream of economic freedom and why Americans go to great lengths to overcome whatever barriers stand in their way.
Those barriers are high indeed when the economy and the housing market seemingly conspire against prospective homebuyers, as they are today. The dream of homeownership recedes to implausibility for many in our current housing market, where prices and interest rates are high and inventory low to practically nonexistent.
Evergreen Home Loans provides creative solutions to housing market impracticalities in 11 predominantly Pacific Northwest states, helping buyers increase the cash value and competitiveness of their purchase offers and quickly close on the homes of their dreams.
“We know it’s tough to get into the market these days, both for first-time and repeat homebuyers,” said Derek Wilcox, Innovative Products Specialist at Evergreen. “If you can qualify and compete, it always makes more sense to put money toward ownership rather than give it to someone who owns what you’re living in.”
Building on a 36-year legacy of innovation spearheaded by Founder and CEO Don Burton, Evergreen’s chief vehicle for accomplishing that is its CashUp product suite.
Within the suite, the CashUp product raises the value of a buyer’s offer to equal that of other cash offers. StepUp provides financing to help homeowners close on a new home before their old one sells. Fast as Cash offers the same type of financing even when there’s no home to sell.
And when interest rates are rising, Lock-n-List helps sellers by locking in the current rate when the home hits the market.
“We’re always trying to innovate and come up with something new,” Wilcox said.
CashUp Increases the Competitiveness of Purchase Offers
CashUp, launched in 2020, is the suite’s flagship product. Currently available for properties purchased in Arizona, California, Idaho, Nevada, Oregon, and Washington, it addresses a chief concern of buyers when they submit an offer to buy a home: whether they can compete with multiple offers, including cash-only offers.
Sellers generally favor cash offers for the same reason everyone prefers transacting business with as little red tape as possible: There are fewer opportunities for financing to fall through. Cash offers can also close more quickly since no loan needs approval.
However, most first-time and repeat homebuyers aren’t able to pull out their checkbook when buying a home.
CashUp requires the buyer to put up a 10% down payment, with Evergreen essentially fronting the remaining 90% through a credit line extended by a financial partner. That makes the offer a 100% cash proposal from the seller’s point of view — and it is.
“It’s the best way to compete with actual cash offers,” Wilcox said. “Then, once we buy the home, we put the borrower into permanent financing, usually a 30-year fixed mortgage.”
CashUp offers are always no-contingencies offers and can close in as little as 10 days. In 2020, Burton put Evergreen’s innovative products team to work on building the product, and the team quickly rolled it out. CashUp helped equalize the playing field for mortgage consumers interested in taking advantage of market conditions at the time but without true liquidity to compete.
“It was Don’s idea to help homebuyers compete with cash offers and actually get their offers accepted,” Wilcox said. “It was perfect timing to launch in 2020 because rates were at an unbelievably low point, and lots of cash offers were out there.”
Guaranteed Security Plus Underwriting Fuels Access
Evergreen uses creative financing mechanisms in two additional products to help offers stand out at the right time. In StepUp, Evergreen supports homeowners with a home still to sell by issuing a short-term portfolio loan to make a non-contingent offer similar to CashUp.
The portfolio loan disregards the current home payment because it assumes the home will sell. The buyer moves into the new home when the purchase closes, often in as little as 15 days. After their move, they have four months to list and sell that departing home.
After the home sells, Evergreen refinances the homeowner into a full 30-year fixed loan to replace the four-month short-term loan.
“Many people have accumulated more equity in their home over the last few years as home prices have gone up,” Wilcox said. “StepUp lets them use that equity in a bridge loan, borrow against that, and then use it as a down payment.”
Fast as Cash works much the same as StepUp, only the buyer doesn’t need a current home for sale. “It’s a way to make an offer that closes as fast as cash and looks like a cash offer,” Wilcox said.
Sellers value the CashUp, StepUp, and Fast as Cash products because Evergreen backs them up with its Security Plus Seller Guarantee®, a preapproval process carrying a $5,000 guarantee. Sellers receive compensation whenever an Evergreen loan commitment falls through for any reason.
In general, prospective buyers need less than a 45% debt-to-income ratio and at least a 680 minimum credit score to qualify for these products, taking into account occasional slight exceptions in unusual circumstances.
“We need to know who we’re dealing with going into it, especially with the risk of dealing with a cash offer and us putting hundreds of thousands on the line,” Wilcox said.
Creating Affordability and Minimizing Barriers
Evergreen steps up to help buyers and sellers in other ways. For example, in environments with rising interest rates, Lock-n-List helps sellers by locking in the current rate when the home enters the market.
Prospective buyers may purchase the home with an Evergreen loan at the locked-in rate. The seller may use Evergreen to finance the purchase of a new home.
On the buyer side, Lock and Shop allows homebuyers to lock in their interest rate while they shop for their next home. Together, these products establish Evergreen as a leading creative mortgage lender in its markets and an influencer in the mortgage space.
The homebuying market has significantly changed since CashUp appeared in 2020. Wilcox said that although the numbers don’t work quite the same in 2023 as in the pandemic year of 2020, there’s still a compelling case for CashUp because it continues to produce a competitive advantage for homebuyers.
“We’re seeing buyers put in offers at 20, 30, even 50 grand below asking price. And they’re getting accepted because they’re cash offers and can close quickly,” he said. “Maybe you’re not competing with 10 cash offers like in 2020, but now you’re putting in that offer below the asking price and getting a good deal for a home.”
Things have even gotten to the point where seller-paid buydowns are reducing mortgage costs for buyers with cash offers. In today’s moribund market, it’s a productive strategy for moving a home sitting unsold. Additionally, that strategy may extend the dream of homeownership and generational wealth to a family that otherwise could not afford it.
“Since we’re offering full cash and a quick close, sellers are pretty happy to get their homes sold quickly,” Wilcox said.