Quontic Bank, which bills itself as an “adaptive digital bank,” has launched what they refer to as a “first of its kind” no doc home loan with loan amounts as high as $3 million.
The non-Qualified Mortgage (non-QM), which is available nationwide, doesn’t require income or asset verification, similar to the loans offered during the lead up to the mortgage crisis over a decade ago.
Quontic Streamline Refinance Highlights
- No income or asset verification
- Minimum credit score of 660
- Must have clean 24-month mortgage payment history
- Max LTV of 80%
- Loan amounts up to $3 million
- Mortgage rates start at 4.875%
- Closing costs may be rolled into loan
- Can close in less than 30 days
All that is required is a 660+ FICO score and a clean 24-month mortgage payment history.
The bank doesn’t ask for tax returns, W2s, bank statements, or any other documents typically required to qualify for a home loan.
Additionally, a home appraisal may not be required if the loan amount is $400,000 or less.
In terms of interest rates, Quontic says they start at 4.875%.
While well above current market rates for a 30-year fixed, they may be much lower than what these homeowners would otherwise qualify for.
They note a borrower with a $400,000 loan amount and a 7% mortgage rate could save over $500 per month if refinancing to a rate of 4.875%.
The loan can be closed in less than 30 days thanks to the reduced documentation requirements, and while standard closing costs apply, they can be rolled into the loan amount.
Quontic believes the product is a perfect fit for borrowers who’ve had difficulty qualifying for a mortgage in the past, or who financed their home at a higher-than-market rate.
Of course, you should always shop around to see what else you might qualify for, including streamline refinance options associated with the FHA and VA.
You may also think you don’t qualify for a traditional mortgage when in fact you do.
Quontic Is a Community Development Financial Institution (CDFI)
The NYC-based bank is able to offer these types of loans because it’s a Community Development Financial Institution (CDFI), whose mission is to provide mortgages to low income and underserved households.
This includes immigrants, seniors, Millennials, self-employed borrowers, and those who have traditionally had trouble securing home loan financing.
Per Quontic, CDFIs are required to lend at least 60% (in both units and dollars) to home buyers in their target low-income markets.
Apparently only 2% of banks in the United States are considered CDFIs, and Quontic was able to claim this status because roughly 70% of their home loans go to low income populations.
In late 2019, the company was awarded an expanded national low-income target market by the CDFI, which is a department of the U.S. Treasury.
They had originally been limited to the boroughs of New York City, along with Nassau and Westchester counties in New York state.
The bank also offers an owner-occupied Community Development Loan (CDL) that requires little or no income verification for home purchases.
It is geared toward self-employed individuals who may not qualify for a mortgage based on their reported income.
Additionally, they’ve got an investment property loan program that is no ratio, meaning no DTI ratio is calculated because they don’t verify income.
While it sounds like 2006 all over again, my assumption is they have rules in place to ensure the loans are underwritten properly, like ensuring a borrower’s ability to repay.
Quontic has lent nearly $3 billion to “those in need” to date.