Angel Oak Mortgage Solutions LLC, a nonbank wholesale and correspondent non-qualified mortgage (non-QM) lender, recently announced a groundbreaking enhancement to its debt service coverage ratio (DSCR) loan program — the launch of a rental automated valuation model (AVM). This new technological enhancement incorporating Clear Capital’s Rental AVM marks an industry first, instantly estimating data-backed rental income for rental property calculations held through closing, delivering unprecedented certainty and speed to brokers and borrowers alike, according to a release from Clear Capital.
For years, a tedious, manual appraisal process has challenged DSCR loans. This process can take weeks and often results in changes to loan parameters and rates just before closing. Angel Oak’s new rental AVM eliminates this uncertainty by using the same MLS data and comparable analysis that appraisers use. The algorithm-based analysis enables the firm to reliably estimate rental figures within seconds.
Once a pre-qualification is submitted and meets credit requirements, Angel Oak’s system instantly generates a rental AVM figure for the property. That number is then locked in for the loan term, barring significant changes, giving brokers and borrowers confidence that the loan will close under the agreed parameters.
While other lenders have to wait for a physical appraisal to determine the actual DSCR, Angel Oak’s rental AVM determines that upfront, ultimately helping borrowers reach closing faster.
“This is a game-changer for rental owners and borrowers and our vertically integrated platform with our affiliated asset management business, Angel Oak Capital Advisors, strengthens our ability to bring innovative solutions to the market,” Angel Oak Mortgage Solutions President Tom Hutchens said in the release. “For the first time, borrowers and investors can have a higher surety of execution from day one with Angel Oak, which means faster timelines, fewer surprises and happier borrowers.
“No other lender in the industry offers this kind of certainty and speed for DSCR loans,” Hutchens added. “This enhancement gives originators a competitive edge and provides investors with the confidence to act quickly in today’s dynamic rental market.”