In the latest sign that the market for loans outside the Qualified Mortgage box is thawing, Sprout Mortgage announced Wednesday that it is rolling out a new jumbo mortgage program.
Sprout was among a number of companies that froze their non-QM lending activities as the coronavirus was first starting to crush the U.S. economy.
At the end of March, Sprout paused its lending activities. But the company began lending again in early May.
And now, the company is launching a new jumbo mortgage program for purchases and refinances. The program, which Sprout calls Premier Jumbo is available for loans up to $3 million.
According to Sprout, the program features loan-to-value ratios up to 90%. The program also features a minimum qualifying credit score of 660, up to 43% debt-to-income ratio, and borrowers are not required to obtain private mortgage insurance.
Shea Pallante, Sprout’s chief production officer, said the program is available for borrowers buying or refinancing primary homes, second homes, and investment properties.
Sprout’s roll out of the jumbo loan program comes at a time when jumbo mortgages have become harder to get. According to a recent report from the Mortgage Bankers Association, jumbo mortgage credit availability fell by 22.6% in April.
But with Sprout and other lenders moving back into the jumbo space, that decline could soon begin to reverse.
“This program is engineered to provide borrowers with the jumbo loan amounts they need to purchase or refinance a premium home,” Sprout President Michael Strauss said. “With the addition of the new Premier Jumbo offering, Sprout is once again identifying, and responding to market demand while maintaining our credit and collateral standards to produce the highest quality loans.”
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