New American Funding Mortgage Review

New American Funding has been in the mortgage lending business since 2003 and is headquartered in Orange County, California. With 204 branches in 31 states, New American is leading the way in lending processing speed and diversity in the workplace. This lender serves 48 of the 50 states in the U.S. and recently won two Stevie Awards for Fastest Growing Company and Company of the Year.

While New American Funding could be a solid option for most borrowers, it is best known for helping to bridge the gap for minorities to build generational wealth through homeownership. If you’re looking for a mortgage loan with a lower credit score, this lender could be a good fit — but the average interest rates it offers mean it won’t be the right move for every borrower. Here’s what you need to know about New American Funding.

We compared New American Funding to other mortgage lenders, reviewing fees, customer satisfaction, customer support, perks and credit impact to check rates using our proprietary SimpleScore methodology.

Best for Sub-Optimal Credit – New American Funding

A great option for borrowers with lower credit scores or nontraditional income sources thanks to flexible lending parameters and a wide variety of mortgage loan products.

J.D. Power Rating
N/A
Min. Credit
500
Min. Down Payment
3%
SimpleScore
4 / 5.0
close
SimpleScore New American Funding 4
Perks 4
Credit Impact 4
Customer Satisfaction N/A
Product Variety 5
Fees 3
  • Can go from application to funding in 14 days or less in some cases (guarantee suspended because of COVID-19)
  • Can complete the process online, over the phone or in-person
  • Offers a wide variety of mortgage loan options for purchasing and refinance
  • Average rates and fees
In this article

    New American Funding at a glance

    AvailabilityAll states except New York and Hawaii (branch locations in 31 states)
    BBB ratingA+
    Minimum down payment3% on conventional loans; 3.5% on FHA loans; 10% on jumbo loans
    Minimum credit score600
    Flexible mortgage terms and programsOffers a variety of in-house programs to help with assistance or allow buyers to customize their loan products.

    What we like about New American Funding 

    Quick funding

    For those looking to purchase a home, New American Funding usually offers a 14 Business Day Close Guarantee. Once the application package is completed, NAF will have your loan completed and closed in 14 days or less. This guarantee is only for certain loans and does not apply in events outside of their control.

    [ Read: How to Get a Preapproved Mortgage ]

    Please note that due to the current COVID-19 pandemic, New American Funding has suspended its close guarantee until further notice. Once this guarantee is back up and running, though, it will help New American Funding stand out among other lenders.

    Online convenience

    With New American Funding, you have options for completing your application and providing the necessary documentation for approval from the comfort of your own home. You can complete the process fully online by using this lender’s secure system to upload documents. If you’d rather speak with a lending representative or complete the process in person, you can simply give the lender a call or stop by one of the branches for personalized service.

    Manual underwriting

    While the application process can be done with a hands-off approach, the underwriting process with this lender takes a different approach. With New American Funding, each application is manually reviewed and underwritten by a loan officer. This personal touch to the approval process allows nontraditional borrowers with non-traditional income sources or those with spotty credit scores and credit history to qualify for a mortgage when other lenders may turn them away.

    [ Read: 6 Ways to Make Your Mortgage Application Easier ]

    Loan variety

    There is no shortage of mortgage loan types available for eligible homebuyers, and New American Funding offers almost all of them. From conventional to FHA to VA to I CAN to Buydown to reverse mortgage loans, New American can help most borrowers get the loan that’s right for them. This lender even offers the ability to customize certain loan factors, like the loan term, to borrowers who want it.

    [ Read: 15-Year or 30-Year Fixed Mortgage: Which Is Right for You? ]

    Things to consider

    Undisclosed fees

    New American Funding doesn’t offer information on its fees unless you apply for one of its mortgage products. Once a quote is provided, you can review the additional costs and fees tied to the loan, along with the annual percentage rate, to determine if this lender’s products are right for you. That lack of transparency makes it difficult to understand what you’ll be paying for your loan on top of the interest, which isn’t ideal.

    Not available in all states

    Though most home buyers in the United States can apply for a mortgage or refinance with New American, people in New York and Hawaii cannot. If you’re in one of these states, you’ll have to find another option for a lender.

    If you prefer to work with the mortgage lender in person, New American has branches in 31 states.

    [ Read: PMI: What Is Private Mortgage Insurance? ]

    New American Funding vs. the competition 

    SoFi is another digital lender offering mortgages, but SoFi has a 10% down payment requirement, which is high compared to New American Funding’s requirement of 3% down.

    J.D. Power Rating
    N/A
    Min. Credit
    660
    Min. Down Payment
    10%
    SimpleScore
    3.5 / 5.0
    close
    SimpleScore SoFi 3.5
    Perks 2
    Credit Impact 5
    Customer Satisfaction N/A
    Product Variety 3
    Fees 4

    SoFi offers conventional fixed-rate mortgages, refinances and home equity loans.

    To get a rate with SoFi, you have to create an account and provide some information. It also has more stringent credit requirements to qualify, but self-employed individuals have more opportunity here than some other lenders.

    AmeriSave has competitive mortgage rates that are similar to New American Funding, but this lender offers an incentive.

    J.D. Power Rating
    N/A
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    4 / 5.0
    close
    SimpleScore Amerisave 4
    Perks 4
    Credit Impact 4
    Customer Satisfaction N/A
    Product Variety 4
    Fees 4

    If another lender offers lower rates or fees, AmeriSave will match it or pay $100. It has similar credit score requirements to New American Funding, too, but it also has a more strict debt-to-income ratio when compared to New American Funding.

    AmeriSave also offers jumbo loans up to $1,500,000 for well-qualified applicants. The application can be completed online and loans are available in 49 states. Read our full AmeriSave mortgage review to learn more about this lender’s mortgage products.

    PrimeLending is similar to New American Funding thanks to the online application process, competitive rates and variety of mortgage product options. This lender is unique in one area, though: the fees.

    J.D. Power Rating
    N/A
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.8 / 5.0
    close
    SimpleScore Prime Lending 3.8
    Perks 4
    Credit Impact 3
    Customer Satisfaction N/A
    Product Variety 5
    Fees 3

    Most lenders charge you fees based on the total amount of your loan. PrimeLending charges a flat fee on loans instead — which amounted to about $1,400 as of June 2020. PrimeLending offers mortgage loans in all 50 states and the District of Columbia. Read our full PrimeLending mortgage review to find out if it’s right for you.

    How much does a New American Funding mortgage cost? 

    Costs and fees will vary based on a number of factors, including your credit score, mortgage amount, down payment and loan type. Expect to pay from 2% to 5% of the purchase price in closing costs. Data from ClosingCorp shows the average out of pocket closing cost was $5,749 with taxes included and $3,339 without taxes in 2019.

    Fees are not disclosed by New American Funding without first submitting an application, so it’s hard to estimate what your total costs will be on a mortgage loan with this lender. If you qualify, a loan estimate will be given to you that outlines the various fees and costs you can expect to pay at closing.

    [ Read: Tips for Getting a Mortgage ]

    Cheaper alternatives to New American Funding mortgages 

    There could be cheaper alternatives for mortgage loans compared to New American Funding. Other companies offer similar speed and online options, like LoanDepot, Rocket Mortgage and PrimeLending.

    PrimeLending has a similar down payment and credit score requirements as New American, but this lender offers $2,000 in closing cost incentives.

    LoanDepot doesn’t disclose its fees without an application, like New American, but they also require a higher minimum credit score of 620 compared to 600. If you qualify, this could mean better rates and cheaper out-of-pocket costs.

    Those who qualify for a VA or FHA loan can get a better APR with Rocket Mortgage compared to New American Funding’s rates. The APR is the true cost of the mortgage, including interest rate, PMI, prepaid interest, and other fees.

    New American Funding in the news

    • For years, New American Funding has been paving the way for minority communities to realize their dream of ownership. In November 2020, NAF’s minority lending numbers were 44.9% higher than other mortgage lenders, with 32.9% of new purchases loan applications coming from minorities.
    • In February 2020, New American Funding was once again certified by Great Place to Work®. While a typical U.S.-based company has an average of 59% of employees stating it’s a great place to work, New American’s employees came in at 94%.
    • Co-founder Patty Arvielo won the Association of Latino Professionals of America’s Most Powerful Latinas award in 2020. As a first-generation Hispanic-American, diversity and inclusion are fundamental aspects of the company’s success. Says Arvielo, “Our company is strong because of its diversity. Being successful means not just doing great in business but spreading a wealth of ideas and kindness to truly empower ourselves and the community for the meaningful and measurable change we want to be.”

    Compare top mortgage lenders

    We welcome your feedback on this article and would love to hear about your experience with the mortgage lenders we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore

    We break down each of these five factors and their rating criteria for our review of the best mortgage companies.

    Why do some brands have different SimpleScores on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores because they offer more than one financial solution — like home loans, auto loans, personal loans and more.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of a brand’s services and how it compares to competitors’ services.

    Perks

    Mortgage lending companies that provide more perks receive a higher score from us.

    Hard/Soft credit checks

    We know that credit checks affect your score –– that’s why we favor companies that offer soft credit checks or hard credit checks when you want to see your pre-approval rates.

    Customer satisfaction

    We use the J.D. Power 2019 Mortgage Origination Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)

    Product variety

    Mortgage lenders that offer more products for their home loans are given higher scores.

    Fees

    Fees can add up fast. Companies that don’t require as many fees for your home loan receive a higher score with us.

    Mandy Sleight

    Contributing Finance Writer

    Mandy Sleight is a freelance writer and has been an insurance agent since 2005. She creates informative, engaging, and easy-to-understand content on the topics of insurance, personal finance, sustainability, and health and wellness. Her work has been featured in Kiplinger, MoneyGeek and other major publications. Learn more about Mandy and her writing on her website or by connecting on LinkedIn.

    Reviewed by

    • Angelica Leicht
      Angelica Leicht
      Mortgage Editor

      Angelica Leicht is an editor at The Simple Dollar who specializes in mortgages, mortgage refinancing, home equity loans, and HELOCs. She is a former contributing editor to Interest.com and PersonalLoans.org.