Change Home Mortgage offers common sense lending solutions
BY LIZA LONG
PHOTOGRAPHY ASHLEY FRITSCHE
Ken Hollibaugh has been in the mortgage business for more than twenty years, and he knows how life-changing home ownership can be. But for many otherwise well-qualified borrowers, there can be too many strings attached when it comes to qualifying for conventional mortgages. In the Treasure Valley’s tight real estate market, the need for lenders who can think outside the box has become critical to making sure potential buyers can purchase their dream homes.
That’s where Change Home Mortgage comes in. As a CDFI-certified mortgage bank, Change Home Mortgage intentionally serves the underbanked community. From retirees who want to relocate to the Treasure Valley to self-employed individuals who don’t fit in the conventional mortgage documentation box to investors looking to maximize the power of their existing equity and assets, Change Home Mortgage works to find solutions that make home buyers’ dreams a reality.
I spoke with Hollibaugh, the Boise branch manager for Change Home Mortgage, in March 2022 about the bank’s unique approach.
“What we offer is common sense lending,” Hollibaugh told me. “We offer well-qualified buyers who might not be able to qualify for a conventional loan a pathway forward.”
Like most people, I had never heard the term “CFDI” before researching background on this article. CFDI stands for Community Development Financial Institutions fund, which is overseen by the U.S. Department of the Treasury. According to the Department of Treasury website, CFDI-certified lenders like Change Home Mortgage form “a network of mission-driven institutions that serve and empower economically distressed communities. This translates into real change & opportunities for the communities and people who need it most.”
My goal is to get
back to common sense lending.
I want to help
buyers be able to enjoy the home of their dreams.
Ken Hollibaugh, Boise Branch Manager
for Change Home Mortgage
THE COMMUNITY MORTGAGE:
Self-employed borrowers, gig workers, and owners or employees of cash-based businesses can struggle to provide the earnings history documentation that conventional lenders require. With a qualifying credit score of 640 and 15% down, Change Home Mortgage can help these buyers purchase their home. There’s no mortgage insurance required, and 100% of the buyer’s available assets can be used to qualify. Hollibaugh told me about a roofing contractor with good credit and business cash reserves who was able to close on his loan within 30 days at a rate close to current conventional mortgage rates.
ALT-DOC (ALTERNATIVE DOCUMENTATION) PROGRAM:
For buyers who do not meet traditional documentation requirements,
this program may offer more flexibility. Using one-year history for Income, this product allows options using 1099, W-2, bank statements (business or personal) or one-year tax returns to qualify. Higher net worth borrowers can also use their assets to qualify. For example, Hollibaugh was able to help a tattoo artist with largely cash-based business qualify for and purchase a home.
For investors who want to avoid the traditional debt/income ratio calculation, this program allows buyers to include a property’s rental income to qualify for rates closer to prime. This program focuses on the cash flow of the property and not the borrower’s personal income history. Hollibaugh told me about a woman who used the program to purchase a $752,000 Harrison Boulevard home to convert it to an AirBnB. With Change Home Mortgage’s programs, investors can have up to 20 financed properties and are not subject to the 10-property limit of conventional lending.
PRIME PLUS PROGRAM:
Anyone who has tried to purchase a home in the Treasure Valley in the last two years knows that the purchase price can sometimes seem just out of reach. This program is designed for homes that fall outside conventional lending guidelines for loan amount and debt to income.
FOREIGN NATIONAL PROGRAM:
For borrowers who are not U.S. citizens, this program may allow them to purchase an investment property.
EZ PRIME PROGRAM:
This program is ideal for retirees who may be relocating after selling a
home elsewhere and who want to keep their home equity assets liquid for things like travel.
If any of these programs conjure up bad memories of the 2008 housing bubble, Hollibaugh stressed that the Change Home Mortgage’s requirements are not at all like the subprime loans from that period. The Treasury Department closely monitors the loans’ performance. “Buyers always have a vested equity interest and relevant assets,” he said. “These loans perform.”
Hollibaugh hopes to connect with local real estate agents and title companies. “I’m not here to interrupt a relationship with your preferred lender,” he said. “But if a conventional mortgage isn’t working out for your buyer, I have options, and I can help to close the home sale.”
He also wants financial planners, investors and small business owners to recognize that they have options beyond traditional lending for themselves and their clients. “My goal is to get back to common sense lending,” he said. “I want to help buyers be able to enjoy the home of their dreams.”