New investor-loan capability extends Friday Harbor’s non-QM support to a segment representing more than one-third of non-QM production
Friday Harbor today announced expanded support for investor loans, including debt service coverage ratio (DSCR) loans.
The new capability builds on Friday Harbor’s recently launched non-qualified mortgage support at a time when non-QM loans account for more than one in 10 mortgage originations and investor-focused products make up a significant share of that market. In August, asset-based, fix-and-flip and DSCR loans represented more than 35% of non-QM production, according to Optimal Blue.
Unlike traditional mortgages, DSCR loans qualify borrowers primarily on a property’s rental income rather than personal income or tax returns. Their specialized guidelines can make these loans time-consuming and difficult for loan officers who do not work with them every day, forcing them to stop and consult an underwriter or other specialist when questions arise.
Friday Harbor reviews leases, appraisal-based rent schedules, property information, borrower and entity documentation and other deal details against applicable program guidelines before underwriting, giving loan officers the guidance they need to work through those scenarios themselves.
“DSCR loans can be a great opportunity for lenders, but they are difficult to scale when only a small number of people in the organization know how to structure them,” said Theo Ellis, founder and CEO of Friday Harbor. “By putting that expertise in originators’ hands earlier, Friday Harbor gives more of them the confidence to evaluate these deals, work through questions and compete for a growing share of the market.”
