Carrington lowers non-QM threshold to 550 FICO, expands guidelines

Carrington Mortgage Services announced Tuesday that it’s expanding its Flexible Advantage non-QM loan program with new eligibility guidelines aimed at borrowers who may not qualify for traditional mortgage financing. The privately held nonbank lender said eligible borrowers using alternative documentation can now qualify with FICO scores as low as 550. The changes also expand options for self-employed borrowers, first-time homebuyers and experienced real estate investors, including some who do not meet traditional debt-service-coverage ratio (DSCR) requirements. Other enhancements include alternative income documentation for self-employed borrowers, no FICO-based restrictions on eligible cash-in-hand funds used for reserves, and financing of up to 65% loan-to-value (LTV) for eligible alternative-documentation transactions. The news comes as Carrington recently completed its acquisition of Valon Mortgage, adding about 810,000 loans to its servicing book. The deal combines Carrington’s government mortgage servicing expertise and scale with ValonOS, Valon’s mortgage servicing technology platform, which Carrington plans to use as its core servicing platform. In July, the company select...