1/25/24 – Non-QM Loans

Non-QM is not the same as non-warrantable! Non-QM stands for non-qualified mortgages, which are loans that are generally at higher rates or have different types of terms than a regular agency loan. Many non-QM loans exist, but I will start with the basics and work around the horn.

Bank Statement Loans – 12-24 Months of bank statements for self-employed people who don’t show enough income on their taxes but have enough deposits to qualify for a mortgage. We can do these with 15% down, but most people have to put 20% down due to some restrictions with less than 20%.

DSCR –  This loan is for investment properties and uses the investment property income to qualify a borrower for a loan. The goal used to be that the payment needed to be less than the rent, but now we have options where the payment can exceed the potential rent, making it easier for buyers to increase their rental portfolio.

Profit and Loss Loan – This loan takes a profit and loss signed by an accountant that will show the business’s profit. We don’t need to look at taxes or bank statements, just the Profit and Loss statement.

The above loans are excellent products for clients who don’t fit into the regular boxes. If a buyer has a 20% down payment and a decent credit score, then we can find a way for them to get a loan.

Condo / Townhome issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE:

1. Scenic Hills – Insurance
2. Bouquet Canyon Village – Insurance
3. Madison at Town Center: FHA financing is available with 3.5% down. Non-warrantable loans can be done with a minimum of 10% down until the litigation is resolved.
4. Cornerstone – Insurance
5. Canyon Oaks – Insurance
6. Brookside Walk – Insurance –
7. Shadow Ridge – Oak Park – Insurance
8. Sierra Glen Condos – Insurance
9. American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough!  One just funded in there with a conventional loan.  Maybe they fixed something on the insurance.
10. Rainbow Sierra Terrace – Underinsured and voting on Insurance in March! NEW – 1-22-2024!!!

As of today, the list of condos that are having more severe issues:

1. Mariposa: No Loans until further notice. Yes, people are saying they can do them, and the HOA is pushing people to lenders, and we have all been using the same bank that says no more!
2. West Creek Condos and Townhomes: No Loans until further notice. Yes, people are saying they can do them, and the HOA is pushing people to lenders, and we have all been using the same bank that says no more!
3. American Beauty Village West: It looks like the issue is not Insurance, but they have a reserve issue now! We can do non-warrantable loans there with 20% down! YAY! It’s a start, and we hope things clear up and regular financing will be available in the future.
4. Bridgewater, Emeryville  - Insurance issues
5. Cabrini Villas, Burbank  - Maybe able to do 10% down, case by case! Please provide a specific address & LTV & occupancy.
6. Morada, San Diego  - Insurance issues.
7. Parkwoods, Oakland  - Insurance issues.
8. The Summit, San Diego  - Insurance issues
9. The Met at Warner Center, Woodland Hills  - Due to the project size, we can lend with 10% down on the project side that is on Burbank and Owensmouth. They are no longer lending for the project section on Canoga.

Please let me know if you hear anything new on condos or townhouses.

Rates are tad better today than yesterday, but it has not been a great week for interest rates!

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA) are in the high 5’s and low 6’s
• Conventional Loans up to $765,550.00 are in the low to mid 6’s
• High Balance Loans $765,550.00-$ 1,148,325.00 are in the mid to high 6’s
• Jumbo loans above $1,148,325 are in 6’s
• Bank statement loans - They are available with 10% down again! 8’s and 9’s depending on down and credit score.
• No income qualifier – 40% down with reserves! In the 8’s!
• 0 down loans are in the high 7’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - typically 7.500% with limited fees – and they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until February 2024???
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am available all weekend if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text (661-714-6258) or email me at Mike@AugustaFinancial.com.

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!