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“Typically, either the husband or wife gets awarded the property and then divorces, and then has to buy the other one out. Essentially that means they find themselves homeless, but if they have assets in the divorce, we can then get them an owner-occupied loan.”
While in most cases lenders must prove a borrower’s ATR through their employment history, asset-only lending is a different way to solve the problem for those who lack an income stream. For primary residences, as long as the borrower has assets that exceed the loan amount, Acra can give them a loan with relative ease.
That means no paperwork and no DTI for loan amounts of between $100,000 and $10 million, available on traditional 30-year fixed, or 10-year IO 40-year term, with interest rates in the low to mid sevens.
Although a niche market, as there are only an estimated six million people in the country eligible to qualify for ATR, Barrus stressed that the product added “a very unique kind of arrow in a broker’s quiver”, adding that it gives brokers an advantage at a crucial time in the market.
Read more: Changing the narrative: Non-QM vs. subprime mortgages
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