Key facts
- Carrington Mortgage Services lowered its non-QM loan eligibility threshold to a 550 FICO score.
- The company expanded guidelines for self-employed borrowers, first-time homebuyers, and real estate investors.
- Alternative income documentation is now accepted for self-employed borrowers.
- Financing is available up to 65% loan-to-value for eligible alternative-documentation transactions.
- Carrington recently acquired Valon Mortgage, significantly increasing its servicing portfolio.
Carrington Mortgage Services announced Tuesday an expansion of its Flexible Advantage non-QM loan program, introducing new eligibility guidelines designed to assist borrowers who might not qualify for traditional mortgage financing. The company has lowered the minimum FICO score requirement to 550 and broadened options for self-employed individuals, first-time homebuyers, and real estate investors, including those who do not meet standard debt-service-coverage ratio (DSCR) requirements.
Enhancements to the program include alternative income documentation for self-employed borrowers, the removal of FICO-based restrictions on cash-in-hand funds for reserves, and the ability to finance up to 65% loan-to-value for eligible alternative-documentation transactions. These changes aim to provide independent mortgage brokers with more avenues for clients previously declined due to credit, income documentation, or investment profiles.
Allison Arest, executive vice president of lending for Carrington Mortgage Services, stated that the company has a responsibility to offer loans based on alternative financial documents to ensure equal opportunity for homeownership and investment property acquisition. John Vehlewald, vice president and head of MLD marketing, lending strategy and optimization, highlighted Carrington's manual underwriting and credit assessment expertise as key to supporting complex non-QM transactions.
The expansion follows Carrington's recent acquisition of Valon Mortgage, which added approximately 810,000 loans to its servicing portfolio and integrated Valon's servicing technology. The company also recently partnered with Kastle for enterprise AI agents in its contact center and borrower-facing operations. Carrington aims to capture more market share and provide liquidity to the secondary market through these expanded guidelines and competitive pricing.