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Fixed rates are punishing borrowers right now. HousingWire flagged a 10.4% drop in mortgage applications as the 30-year hit 6.57% — and ARM demand is shifting as a result.
Portfolio ARMs exist outside the usual lending rulebook. Lenders keep these loans in-house, so they set their own terms instead of following Fannie Mae guidelines.
620 (typical)
Min Credit Score
3, 5, or 7 Years
Common Fixed Period
Bank Stmts OK
Income Type
Non-QM
Loan Type
Adjustable (ARM)
Rate Type
Portfolio ARMs in Merced
These are non-QM loans — meaning standard debt-to-income rules don't apply. Lenders look at the full picture, not just a W-2.
Credit requirements vary by lender. Most portfolio ARM lenders want a 620+ score, but some go lower for strong assets or large down payments.
Local decision guide
Use this guide to connect portfolio arms eligibility, lender expectations, and local market factors before comparing payment options in Merced.
Fixed rates are punishing borrowers right now. HousingWire flagged a 10.4% drop in mortgage applications as the 30-year hit 6.57% — and ARM demand is shifting as a result.
Portfolio ARMs exist outside the usual lending rulebook. Lenders keep these loans in-house, so they set their own terms instead of following Fannie Mae guidelines.
These are non-QM loans — meaning standard debt-to-income rules don't apply. Lenders look at the full picture, not just a W-2.
Most banks won't advertise these. Portfolio ARMs live in the wholesale channel — credit unions, community banks, and specialty lenders.
We shop across 200+ wholesale lenders to find who's actually holding portfolio paper in Merced right now. Retail banks almost never have these programs.
Portfolio ARMs work best for borrowers with a clear exit. Investors flipping in 3-5 years don't need a 30-year fixed rate — they need cheap money now.
Self-employed buyers in Merced often can't qualify for conventional loans. A portfolio ARM with bank statement income docs solves that problem fast.
A standard ARM follows Fannie Mae rules. A portfolio ARM doesn't — that's the key difference, and it matters for non-traditional borrowers.
DSCR loans use rental income to qualify. Portfolio ARMs can too, but they also work for owner-occupied buyers who just need flexible underwriting.
Merced is a UC campus town with a growing rental market. Investors here often want short-term financing to acquire before refinancing into permanent debt.
Agricultural income is common in Merced County. Portfolio lenders can work with seasonal or irregular income that conventional lenders reject outright.
The lender keeps the loan instead of selling it. That means they set their own guidelines — no Fannie Mae or Freddie Mac rules.
Yes. Most portfolio lenders accept bank statements instead of tax returns. That's a major advantage for self-employed buyers.
It varies by lender. Common structures are 3/1, 5/1, or 7/1 — fixed for the first 3, 5, or 7 years, then adjusting annually.
Often yes. If you plan to hold 5 years or less, the lower initial rate saves real money versus a 30-year fixed.
Most lenders start at 620. Strong reserves or a larger down payment can help if your score is lower.
Some do. Always ask upfront — penalties vary by lender and can impact your exit strategy if you sell or refi early.