ResiCentral is expanding its Non-QM lending options with a new program offering up to 90% loan-to-value (LTV) financing, debt-to-income (DTI) ratios as high as 55%, and more accommodating guidelines for borrowers with past credit events.
The wholesale and non-delegated correspondent lender launched NQM Advantage on Thursday, adding Prime and Plus tiers to its existing lineup of Non-QM products.
Under Advantage Prime, borrowers at least 36 months removed from bankruptcy, foreclosure, or short sale can qualify under the program's full eligibility matrix, which allows up to 90% LTV with a 740 credit score, according to ResiCentral.
The program also permits one 30-day mortgage delinquency within the past 12 months. DTI ratios can reach 55%, subject to residual-income and other requirements.
"A bankruptcy or short sale from three years ago tells me what happened then. The rest of the file tells me where the borrower is today," said Darci Marshall, ResiCentral's vice president of underwriting.
More Room For Self-Employed Borrowers
For eligible service businesses without employees, Advantage applies a 15% expense factor to business bank-statement deposits, allowing 85% of qualifying deposits to count toward income.
That translates to $17,000 in qualifying monthly income on $20,000 in eligible deposits, compared with $10,000 using a 50% expense factor.
Advantage Prime and Plus also allow asset-qualified borrowers to finance primary residences at up to 85% LTV.
For investors, DSCR Advantage permits debt-service coverage ratios as low as 0.75 or a no-ratio option. First-time investors are eligible under the program, although the company did not specify whether all DSCR options extend to those borrowers.
ResiCentral is offering a 25-basis-point pricing improvement on eligible NQM Advantage and DSCR Advantage loans locked through November 30.
Competition Shifts To The Underwriting Details
The launch follows ResiCentral's earlier introduction of Apex and Optimum, which expanded alternative documentation options and introduced same-day income qualification.
"Non-QM isn't the exception anymore. It's a file brokers work every week, and they deserve real choices on it," said Brian Permutt, ResiCentral's president.
The expansion comes as non-QM lenders compete for a larger share of mortgage production. Optimal Blue data showed Non-QM and expanded-guidelines products accounted for 11.3% of August rate-lock volume, with DSCR and investor loans representing 35.1% of that segment and bank-statement loans another 29.8%.
What It Means For Originators
The 15% expense factor could be particularly useful for self-employed borrowers whose qualifying income is reduced under more restrictive bank-statement calculations. The 36-month credit-event seasoning provision also creates another option for borrowers who have reestablished credit following a bankruptcy or foreclosure.
Neither low-ratio DSCR financing nor flexible bank-statement underwriting is unique to ResiCentral. The competitive distinction will come down to how its eligibility requirements, pricing, and execution compare on individual files.
ResiCentral says its dedicated Non-QM team provides pre-submission scenario reviews and same-day bank-statement income determinations that carry through underwriting.
