New Penn Financial LLC has introduced Home Buyer Power, an innovative non-QM loan product that opens up lending opportunities for buyers who may not be the right fit for Qualified Mortgage (QM) loans. The launch makes New Penn one of the first major non-bank lenders to enter this specialized market, which has emerged since stringent new QM requirements went into effect in January 2014.
“Home Buyer Power creates mortgage lending opportunities for customers with strong credit who fall outside the very specific criteria required for QM loans,” said Brian Simon of New Penn Financial. “These are solid buyers with strong income who may have a high debt-to-income ratio.”
While the non-QM loans broaden the pool of customers eligible for a mortgage, the designation doesn’t mean that borrowers are unvetted or underqualified. Buyers will need to provide full income documentation, demonstrate strong credit scores, and meet additional guidelines that indicate their ability to repay.
New Penn anticipates that Home Buyer Power will be the first in a series of non-QM loan offerings designed to serve a wider range of buyers. The product features an interest-only option, and buyers with debt-to-income ratios as high as 55 percent at 80 percent loan-to-value may qualify for loans. Eligible property types include primary residences, second homes, and both warrantable and non-warrantable condos.
“We expect Home Buyer Power to appeal to high-end customers who may be paying expensive metro-area rents. They have the income to support a home purchase, but they may also have higher than average debt obligations,” said Simon. “We are excited to offer our customers new and non-traditional products like Home Buyer Power that meet their very specific and individual needs.”