![]() ![]() Non-QM loans don’t conform to federal standards and restrictions and are not government-backed, so they can have greater flexibility. In response, non-QM loans were developed to allow everyone to have access to the American dream of homeownership. ![]() ![]() These standards prohibit some strong borrowers from obtaining loans due to their income sources or other limitations. While intended to provide consumer protection, the Act also introduced more rigid requirements for income verification. With the Dodd-Frank Act of 2010 came a new standard for qualifying mortgages. We will also dispel some misconceptions about non-QM loans, so you can move forward with greater knowledge and confidence. We’ll help you understand the value non-QM loans can bring your clients. They appeal to entrepreneurs, those heavily invested in stock, and real estate investors who have been locked out of the market due to the nature of their income streams. These loans are especially suited to the current market. Notable within the new line of products is the array of non-qualified mortgage, or non-QM, loans. combine platforms, a wider range of loan products is now available to Caliber partners. Non-QM gives credit access to self-employed borrowers who may have been locked out of the market before.Īs industry giants Newrez and Caliber Home Loans, Inc. “Having the full circle of private products, I think we’ll do well in a rates-up environment, especially with such a large broker base across the country that is going to be looking for new products to work on,” Lind said.Non-QM gives you new opportunities to help you better serve your buyers and build your business. In addition to its existing products, Acra plans to launch new programs in 2022, including 1st and 2nd lien HELOC programs. The company is poised to help brokers and lenders succeed in 2022 with its flexible variety of non-QM products, including 3-Month Bank Statement, Investor Cash Flow, Jumbo Non-QM, fix and flip, and small balance multi-family loan programs. That’s great for non-QM, because 40% of our business is investor properties.”Īs the non-QM market has grown, so has Acra Lending – the company has doubled in size over the last year, Lind said. “They like the asset as a long-term investment. housing stock than ever before,” Lind said. “There’s more people looking to invest in U.S. ![]() Investor-related loans are also seeing an increase, Lind said. The wide variety of non-QM products available through Acra Lending and other non-agency lenders mean there are several other chances for growth within the sector.įor example, the number of self-employed people in the workforce is rising, and those borrowers will need to turn to non-QM loans to better fit their circumstances. With jumbo loans, houses that otherwise would have been priced too high for agency loans are made accessible for borrowers who can afford them. “With that said, they are not going to raise it enough, so more loans are going to fall into the jumbo market than they previously did,” Lind noted. This growth in home prices is expected to spur the GSEs to raise their conforming loan limits. And according to the MBA’s Builder Application Survey, the average new home loan size reached over $412,000 in October, a record for the survey. Fix and flip loans offer borrowers the ability to renovate and rehab older homes to make them more appealing to homebuyers once they’re placed back on the market.Īdditionally, home prices are up nationwide, with home-price growth reaching a record high earlier this year. is short somewhere between 4 and 5 million homes, so the fix and flip market is here to stay,” Lind said. New construction has been hit hard by supply chain disruptions and materials and labor shortages, and inventory of existing homes is tight. The housing supply constraints on the market also open up a few opportunities for non-QM growth. that were picking up the low-hanging fruit on agency loans, are going to need another product to focus on, and that’s non-QM.” Lind said. Purchase mortgage originations in total are expected to grow 9% to a new record of $1.73 trillion in 2022, according to the Mortgage Bankers Association – non-QM will be part of that, of course.Īt the same time, however, the MBA’s outlook for next year included an anticipated 62% decrease in refinance originations, down to $860 billion from $2.26 trillion.Īccording to Lind, the decline in refinances is, “a tailwind for non-QM.” There are a few market factors contributing to this expected growth for the non-QM sector. “The amount of equity in these loans, the underwriting, the guardrails around ATR have proven that this is a real, sustainable product that investors like.” “There is a bigger consensus of confidence in the product now,” said Keith Lind, executive chairman and president of Acra Lending. As we look forward to 2022, the non-QM market is predicted to grow substantially. ![]()
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