Specific Jumbo financing for high net worth borrowers
Non-QM loans play a crucial role in serving high net worth borrowers and jumbo loan individuals who are unable to secure financing through Government-Sponsored Enterprises (GSEs) because the loan amount surpasses conforming limits. While these borrowers typically present a strong credit profile, they seek Non-QM solutions to accommodate large loan sizes, utilize non-traditional income documentation, or access specific loan features like interest-only payments.
Dedicated Ultra-Jumbo Program (Horizon Elite Jumbo)
Our Horizon Elite Jumbo program is explicitly designed as a specialty program for highly qualified, high net worth borrowers who have solid and stable income and credit, along with considerable assets.
| Feature | Program Requirement |
| Maximum Loan Amount | Up to $5,000,000. |
| Occupancy | Primary Residence only. |
| Minimum FICO | Minimum score of 720 is required. |
| Maximum DTI | Capped at 38%. |
| Special Loan Term | Offers a 40-year Fixed Interest-Only (IO) option. |
| Reserves | Reserves scale significantly with loan size: 12 months required for loans >$3.5MM to $4MM; 18 months required for loans >$4MM to $5MM. |
| Cash-Out Limit | Maximum cash-out (cash in hand) is limited to $1,500,000. |
High-Limit Options in Non-QM Series
Other Non-QM product series provide high-limit financing, typically up to $3.5 million, using flexible income documentation tailored to HNW or self-employed professionals:
- Sharp Expanded Program: This program offers a maximum loan size of $3.5 million. It allows a maximum LTV of 90% and is intended for borrowers with clean derogatory housing event history (at least 48 months clean).
- Horizon Standard/Expanded and Edge Elite: These series support loan amounts up to $3,500,000 for Primary Residences and Investment Properties.
- Non-QM Connect: Loans up to $3,000,000 are permitted for Full Documentation and Asset Qualifier transactions. Loan amounts greater than $2,000,000 typically require Underwriting Manager approval, and there are generally no exceptions to this maximum loan limit.
HNW Qualification Methods: Leveraging Assets and Liquidity
Many high net worth borrowers need jumbo financing not because of poor credit, but because their capital is held in investments, making traditional W-2 or tax-return verification ineffective. Non-QM programs address this through asset-based documentation:
- Asset Depletion/Asset Qualifier Loans
Asset depletion loans are singularly focused on borrowers who have high asset balances but do not meet standard income verification requirements. This makes them perfect for retired professionals, investors living off portfolios, or high net worth individuals without a regular paycheck.- Qualification Method: The program calculates an imputed monthly income by dividing the Net Qualifying Assets by 84 months.
- Eligible Assets: Acceptable assets often include checking/savings accounts, money market accounts, mutual funds, stocks, and bonds, as well as retirement accounts (subject to access restrictions, such as age 59½+).
- Loan Limits: The Flex Supreme program supports Asset Depletion loans up to $3 million.
- Asset Qualifier DTI: For the Asset Qualifier product, DTI is not developed. Instead, the borrower must meet a minimum monthly Residual Income requirement.
- Interest-Only (IO) Payments
HNW borrowers often seek Interest-Only features for strategic financial management and liquidity, as these features are prohibited in Qualified Mortgages (QM).- Availability in Jumbo Programs: IO options are available across many high-limit programs. For instance, the Sharp Expanded program allows IO payments with a minimum FICO of 700 and a maximum LTV of 85%.
- Loan Terms: IO periods typically last 10 years (120 months), followed by amortization over the remaining loan term (e.g., 20 years for a 30-year fixed loan, or 30 years for a 40-year fixed loan).
- Qualifying Payment: Even when the borrower is making IO payments, the loan is typically qualified based on the higher, fully amortizing payment over the remaining term.
Underwriting Requirements for Jumbo Non-QM Loans
High loan amounts introduce specific underwriting requirements, particularly concerning collateral and valuation:
- Mandatory Dual Appraisals: Loans with a principal balance greater than $2,000,000 require two full appraisals from two separate, independent appraisers. The lower of the two appraised values is used to determine the Loan-to-Value (LTV) eligibility. This also applies to HPML flips.
- Maximum Loan-to-Value (LTV) Ratios: As loan amounts increase, the maximum LTV generally decreases. For loans between $4,500,001 and $5,000,000 in the Horizon Elite Jumbo program, the maximum Purchase LTV is 65% (740 FICO) or 60% (720 FICO).
- Investor Exposure: The investor monitors total financing exposure to a single borrower or guarantor, often limiting aggregate unpaid principal balance (UPB) to $5,000,000 or 10 loans across various Non-QM series.
FAQ's
For the highest loan amounts (up to $5,000,000) under the Horizon Elite Jumbo program, the maximum Purchase LTV is capped at 65% (with a 740 FICO score) or 60% (with a 720 FICO score).
A key benefit is the retention of capital liquidity. The borrower chooses to finance the purchase to keep their money invested elsewhere rather than converting their assets into a non-yielding cash asset.
Loans with a principal balance greater than $2,000,000 and LTV/CLTV greater than 65% generally require two full appraisals from separate, independent appraisers.
For Horizon Elite Jumbo loans over $3.5MM up to $4MM, 12 months of reserves are required; for loans over $4MM up up to $5MM, 18 months of reserves are required.
The Horizon Elite Jumbo program often offers a 40-year Fixed Interest-Only (IO) loan option, a feature explicitly prohibited under Qualified Mortgage (QM) guidelines.
he Horizon Elite Jumbo program, which handles the largest loan amounts, specifies a maximum DTI ratio of 38%.
HNW individuals often use Asset Depletion or Asset Qualifier loans, which calculate qualifying income from the borrower’s investments, savings, or retirement funds instead of relying on W-2s or tax returns.
The maximum loan amount for the Horizon Elite Jumbo program is $5,000,000.
The Horizon Elite Jumbo program is a specialty Non-QM offering tailored for high-net-worth borrowers.
Jumbo loans are non-conforming loans that surpass the limits set by GSEs like Fannie Mae and Freddie Mac. Non-QM financing is used because these products have no loan limit caps, allowing them to fund loans that exceed conventional size limits.
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For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.
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