How can today’s mortgage lending market be summed up in one word? For homeowners who purchased their property during COVID when mortgage rates were near 3%, the word “comfortable” may come to mind. Mortgage brokers enjoyed equal success then, as lower rates allowed them to qualify more borrowers and bring more revenue. For them, the word would likely be “flowing.” The post-pandemic market was a utopia for aspiring homebuyers and mortgage brokers in the market, and some probably still reminisce about those times today.
In the modern mortgage market, mortgage rates are close to 7%, and the gig economy has pushed some borrowers away from trying to qualify for conventional mortgages. Some may see this as a challenge, but it means the market is ripe with opportunities for well-equipped brokers. For brokers who work with non-QM borrowers, success depends on working with the right lender — one that can provide the tools and flexibility to meet borrower needs. Acra Lending has done precisely that.
Acra Lending is a proven leader in the space, and it has adapted and thrived despite market shifts. Between 2023 and 2024, Acra still increased its non-QM originations by 47.5%, growing from $2.35 billion to $3.47 billion in fundings.
Presenting unique opportunities in a down market
Your average broker or lender may only see challenges in today’s mortgage market. However, those who offer non-QM products and services will see areas of opportunity.
First, consider the evolving employment market. Job market data may display a well-balanced market, but the reality is that employers are holding onto their current employees instead of hiring new workers. Job seekers have two options: continue to wait or create their income streams. As such, self-employment is growing more common — and those borrowers deserve to be able to buy homes. Mortgage brokers and lenders should be salivating to beat traditional lenders and reach those borrowers.
Beyond that, tightening credit scores. higher interest rates and elevated home prices create openings for non-QM lending. Borrowers often can’t meet traditional credit requirements, and traditional lenders don’t have the tools to serve these borrowers.
Brokers that are equipped with Acra Lending’s non-qm products, technology, and team can serve borrowers where traditional lenders simply cannot.
How Acra Lending sets itself apart in the non-QM market
When describing how Acra Lending sets itself in the non-QM lending space, three words come to mind: people, processes, and technology.
People that know the non-QM space
Acra Lending invests in its team like no other. As one of the first lenders in the non-QM lending space in 2013, the company maintains a staff of experienced underwriters and mortgage operations professionals who can adapt to any situation immediately, regardless of how challenging things may seem. That experience matters. Today, the company is constantly growing and hiring star talent to meet its evolving needs. Incoming underwriters and operations managers undergo extensive training that keeps them updated on the latest non-QM products.
Being efficient is essential to what Acra Lending offers participating lenders and brokers. To save time, Acra employs an eligibility review system for non-QM loans. The system functions similarly to Fannie Mae’s Desktop Underwriting (DU) and Freddie Mac’s Loan Prospector (LP) because it has automated review capabilities. The system undergoes testing and adjustments to meet the needs of non-QM eligibility requirements. It also provides immediate eligibility feedback for brokers during the underwriting process.
Other efficiencies include an automated appraisal review process that simplifies appraisal transfers and assessments. It eliminates the manual component of evaluation and reduces turnaround times. With this process, brokers can validate appraisals before the loan’s submission. It’s designed to resemble A-paper loan processes to help brokers familiarize themselves. Lastly, Acra Lending also uses automated bank statement processing technology that automatically calculates borrower income.
These efficiencies place Acra Lending at the forefront of the non-QM market with innovation. Acra Lending will only continue to evolve as its internal team manages a significant share of the company’s technology development efforts in the future. The company also employs an external development team to support additional tech initiatives. Despite this approach, Acra Lending doesn’t allow technology to overtake its operations fully. The lender doesn’t use technology or artificial intelligence (AI) for its customer-facing roles. This ensures that Acra Lending’s customers receive better, personalized customer service.
Advice for brokers and lenders entering the non-QM market
Succeeding in the non-QM market requires understanding who your customers are and what they seek. Self-employed borrowers, for example, are looking for loans that allow them to qualify with alternative forms of income verification. Or, perhaps a real estate investor is looking to finance a rental property using the rental income as proof of their ability to repay. As a lender or broker, a Debt-Service Coverage Ratio (DSCR) loan would be an excellent option.
Partnering with an experienced, innovative, non-QM lender like Acra can set brokers ahead in an evolving marketplace. Non-QM lending is poised to overtake the mortgage market as we enter 2025. Lenders and brokers should explore opportunities with Acra Lending and establish themselves as go-to options for all borrowers.
To learn more about Acra Lending
First Time Home Buyer FAQs - Via HousingWire.com
