If you’re like typical mortgage professionals, you’ve been busy with conforming business in the last few years. With refinances drying up, if Non-QM programs aren’t part of your toolkit, now is a perfect time to consider new loan solutions for your clients.
Some strong credit borrowers don’t fit into the traditional mortgage mold. When you partner with LendSure, you can offer innovative Non-QM loans with confidence. Trust us to handle all of the details so you can continue to provide outstanding solutions to your clients.
Historically low mortgage rates are in the rear-view mirror, and the demand of rate-and-term finances has diminished. Here are five types of Non-QM loans that are especially relevant in today’s housing market.
1. Bridge Loans. A bridge loan is a short-term, one-year, single-payment loan that borrowers use to get cash-out of a property they’re selling in order to purchase another property—before the sale. In a housing market that’s cooling but remains competitive, buyers often need to move quickly and present a no contingency offer.
With a bridge loan, your borrower looks a lot more like a cash buyer, a big plus in a competitive bidding situation. Bridge loans are a fantastic solution that let your borrowers make stronger offers. Bridge loans equip borrowers with access to the equity in their current home to buy a new home, allowing them to move quickly to take the desired action – all with no monthly payments on the bridge loan. In today’s market, you have to work really hard to get your deals. Bridge loans can help ensure these deals get closed.
2. Fix & Flip. LendSure’s Fix & Flip Home Financing Program is designed for real estate investors who are looking to leverage the purchase and construction of a property. It’s a short-term loan, created for investors who intend to exit with the sale of the property, or to refinance into a long-term rental DSCR loan.
We aim to make a decision on the Fix & Flip term sheet within hours, not days. We work with clients with a credit score as low as 660, and our interest rates are competitive. We primarily service single-family and multifamily properties, but LendSure also considers mixed-use properties, on an exception basis. While LendSure’s Fix & Flip loans are available to novice investors, the terms do fluctuate with the experience of the investor. A very experienced investor – one with a long track record of fix and flip – tends to qualify for higher loan-to-value ratios and lower loan rates.
3. Foreign National loans. The U.S. housing market is quite attractive to affluent buyers from other countries.
A foreign national is a non-resident alien who is not authorized to live or work in the United States, or who holds a work visa. More foreign national buyers come from China, Canada, India, the United Kingdom and Mexico than anywhere else in the world. But borrowers from almost anywhere can qualify if they meet the parameters. In order to be eligible, the borrower must live and work in another country and be a legal resident of that same country. They may not be purchasing property intended for use as their primary residence. The mortgaged home must be an investment property or a second home.
4. Non-warrantable Condos/Condotels. Condo loans are difficult to secure even in the best of times. Then came the 2021 collapse of an oceanfront condo near Miami, and the agencies tightened rules around condo lending even more. That means many borrowers find themselves unable to qualify for condo loans. But Non-QM loans can provide the solutions your clients are looking for.
5. 5-8 Unit DSCR. LendSure has broadened its loan programs for residential investors. Like many lenders, we previously had limited our investor program to properties with four units or less.Now, though, with residential property values soaring and borrower demand on the rise, we’re expanding our sweet spot to include properties of five to eight units. That means you no longer have to shy away from these deals. LendSure realized that owners of properties with more than four rental units typically had to finance through a commercial lender. That reality meant residential loan officers lost out on the business.
Thanks to LendSure’s expanded debt-service coverage ratio (DSCR) program, you can get these loans closed in a process that’s similar to the residential investor loans you’re already familiar with. There are a few noteworthy differences in the details for this type of loan. For example, the appraisal is done in a commercial process. But overall, LendSure’s DSCR loans will feel very familiar to you. Your LendSure account executive can walk you through the process and will be available to assist the entire way.
LendSure prides itself on being a flexible lender, one that uses common sense rather than rigid rules. The latest condo guidelines from Fannie Mae and Freddie Mac, introduced in early 2022, caused an upheaval in the condo market. If you have a borrower whose conventional deal has been rejected or stalled because of the agencies’ onerous rules, we can help. LendSure’s common sense rules allow for approvals of condo units that the agencies turn down, including condotels.
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers and ratios and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently owned property.
Are you ready to grow your business? Conventional loan approval guidelines can be restrictive, but we want to offer our mortgage broker partners the education, tools, support and guidance they need in order to say “yes” to more of their clients. This ensures happy borrowers and opportunities for bottom-line growth. What are you waiting for? Let’s get started!
