GO Mortgage announced the launch of a Non-QM construction loan program today. The Columbus, Ohio-based company, which is licensed in 36 states and a subsidiary of GO Companies, says that the program is designated for self-employed borrowers and real estate investors seeking to build a home.
GO Mortgage says that the new Non-QM Single Close Construction Loan can be used to finance up to 90% of a borrower’s home construction for loans up to $2 million. The program is aimed toward borrowers who do not qualify for new construction financing through standard income qualifications, such as gig economy workers who don’t have traditional W2 forms.
GO Mortgage says that a borrower’s income can be qualified through 12 to 24 months of bank statements, or on a debt service credit ratio (DSCR) basis using the expected rents on an investment property.
"As one of the first of its kind in the industry, the program was designed to give more borrowers the green light to financing that fits their needs," GO Mortgage CEO Michael Isaacs said.
“Too often, our loan officers were encountering clients who could afford to build, but do not qualify through conventional means or were discouraged by the complicated nature of construction lending,” Isaacs said. “Our new program solves both of these issues, so that any self-employed borrower, business owner or private investor can achieve their homebuilding goals and isn’t left standing on the sidelines.”
The loan can be used for primary residences, second homes or investment properties, including duplexes, non-warrantable condos and manufactured housing. While the program offers the ability to put down as little as 10% toward new home costs, borrowers can also qualify for 80% financing and pay no mortgage insurance with a minimum 680 FICO score.
However, those with credit scores 720 or higher can qualify for up to 85% LTV and pay no mortgage insurance.
The loans will be made through GO Mortgage's wholesale channel.
During the construction phase, GO Mortgage will provide financing at an interest only rate. After construction is complete, GO Mortgage says that borrowers do not have to refinance their construction loan into a permanent loan and then encounter a second closing, which is typical of most construction loan products.
The program allows a maximum build time of 24 months. Borrowers can lock their permanent loan rate within 60 days of the construction’s completion.
“Our mantra is ‘no loan left behind,’” Isaacs said. “It’s demoralizing to miss any opportunity to help someone achieve their homeownership goals, so our job is to make sure we have every product under the sun that a client may need. And when borrowers can’t find the financing they’re looking for, we’ll create it for them.”
