First of all, underserved borrowers are NOT underqualified borrowers. It simply means that there are uneven credit opportunities that don’t allow certain homebuyers to get a home loan under traditional requirements.
- A self-employed homebuyer who takes allowed tax deductions. Their tax returns might not allow them to qualify for a home loan – even though they can afford the home, have good to excellent credit, and have 20% or more for a down payment.
- A borrower who has recovered from a foreclosure three years ago. They have improved their credit and can prove their ability-to-repay a mortgage. Fannie Mae and Freddie Mac’s requirements state a borrower must be seven years out of a foreclosure.
- Real estate investors who can’t use tax returns or don’t meet Agency guidelines for varying reasons are also in the underserved borrower category. They can afford the property – but they don’t check the boxes under Fannie Mae and Freddie Mac.
Each of these very different borrower types have something in common!
They are credit worthy people who deserve a home loan – but they cannot get one under traditional loan requirements. Each one needs a non-QM loan to get to the closing table quickly and easily.
Non-QM Solutions That Serve Non-QM Borrowers: