Loading
Reedley's agricultural economy creates borrowers who don't fit conventional lending boxes. Portfolio ARMs work here because lenders can underwrite based on actual income patterns, not just tax returns.
Farm owners, seasonal workers with large savings, and investors buying rental properties all show up at my desk. These borrowers need flexibility that Fannie Mae won't touch.
Portfolio lenders keep these loans on their own books. That means they set their own rules and can approve deals based on common sense, not just automated underwriting.
Most portfolio ARM lenders want 20-25% down and credit scores above 660. You'll need reserves covering 6-12 months of payments depending on your income documentation.
Income verification is where these loans shine. Bank statements, asset depletion, or revenue numbers work when tax returns show minimal taxable income.
Expect rates to start 0.5-1.5% higher than conventional ARMs. You're paying for flexibility and faster approval timelines.
Not every lender offers portfolio products. Many community banks and credit unions hold some loans in-house, but they often cap loan amounts at $1 million or less.
Private portfolio lenders give you higher limits and more property types. They'll finance investment properties, cash-out refinances, and non-warrantable condos that banks reject.
Rate shopping matters even more here because each lender prices risk differently. A borrower one lender rates at 7.5% might get 6.75% from another based on their specific risk appetite.
I use portfolio ARMs for Reedley farm owners who write off everything and show $40K taxable income but deposit $200K annually. Their tax returns kill conventional approval, but bank statements tell the real story.
The adjustment caps matter more than the start rate. Look for 2/2/5 structures: 2% max increase at first adjustment, 2% annually after, 5% lifetime cap.
Most borrowers refinance before the first adjustment anyway. You're using this as bridge financing until your income documentation improves or you sell the property.
DSCR loans work better for pure investment properties because approval depends only on rental income. Portfolio ARMs require personal income verification but allow owner-occupied purchases.
Bank statement loans offer fixed rates, which beats an ARM if you plan to hold long-term. Choose portfolio ARMs when you need the lowest initial payment or expect to refinance soon.
Conventional ARMs beat portfolio pricing by 1-2% but require W-2 income and full tax return verification. Only consider portfolio products if conventional approval isn't happening.
Reedley properties often include agricultural elements like small orchards or vineyard parcels. Portfolio lenders can value these features where conventional appraisers exclude them.
Seasonal income from farming creates qualification challenges. Portfolio underwriters can average 24 months of deposits rather than requiring consistent monthly income.
Property values in Fresno County stay relatively affordable, keeping most deals under jumbo limits. That expands your lender options since many portfolio programs cap at $1.5 million.
Most programs lock your initial rate for 3, 5, or 7 years. After that, rates adjust annually based on an index plus a margin specified in your loan docs.
Yes. Portfolio lenders can average 12-24 months of bank deposits to calculate qualifying income, smoothing out seasonal variations that conventional underwriting rejects.
Your rate increases by the index movement plus margin, capped at 2% for first adjustment typically. Many borrowers keep the loan and budget for higher payments.
Some do, some don't. Many portfolio programs offer bank statement-only options where they never request tax returns, perfect for self-employed borrowers who write off heavily.
Absolutely. Most portfolio lenders approve non-owner occupied purchases with 25% down and slightly higher rates than owner-occupied properties.
Portfolio ARMs in Reedley