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Portfolio ARMs in Santa Rosa
Santa Rosa's housing stock includes many non-conforming properties—older homes, mixed-use buildings, and Sonoma wine country estates that don't fit agency loan boxes.
Portfolio ARMs let lenders approve deals based on their own credit standards, not Fannie Mae rules. That flexibility matters when you're buying a vineyard property or a downtown commercial-residential hybrid.
These loans stay on the lender's books instead of getting sold to Wall Street. The lender takes the risk, so they write their own underwriting guidelines.
Expect higher starting rates than conventional ARMs—typically 1-2% above conforming loans. You're paying for the privilege of a custom approval process.
Most portfolio ARM lenders want 680+ credit and 20-25% down. Self-employed borrowers often qualify using bank statements instead of tax returns.
Recent bankruptcies or foreclosures don't automatically disqualify you. Some lenders approve deals just two years after a major credit event if compensating factors exist.
Debt-to-income limits stretch to 50% or higher when strong reserves and credit history support the file. One lender we work with approved a 55% DTI for a tech consultant with $400K in liquid assets.
Foreign nationals and recent immigrants qualify more easily than with conventional loans. Portfolio lenders care more about down payment size and reserves than immigration status.
Portfolio ARM lenders fall into three categories: regional banks, credit unions, and private money shops. Each writes different property types and borrower profiles.
Regional banks offer the best rates but the strictest guidelines. Credit unions provide relationship-based pricing—existing members often get better terms than new clients.
Private portfolio lenders approve the hardest deals but charge the most. Their rates start where banks top out, around 8-9% in current markets.
Rate lock periods run shorter than conventional loans—usually 30-45 days instead of 60. If your deal takes longer to close, extension fees add up fast.
Portfolio ARMs shine when you need approval speed on a non-standard deal. I've closed these in 15 days when the borrower brought strong financials and a clean property.
The adjustment caps matter more than the start rate. Look for 2/2/5 structures—2% max increase at first adjustment, 2% per year after, 5% lifetime cap.
Most Santa Rosa portfolio lenders set the first adjustment at 3, 5, or 7 years. The 5-year fixed period offers the best balance between rate and stability for buyers planning to refinance or sell.
Prepayment penalties show up on about 60% of these loans. Terms range from soft prepays (penalty only if you refi, not if you sell) to hard 3-year penalties that hit regardless of exit strategy.
Conventional ARMs beat portfolio ARMs on rate—sometimes by 150 basis points. But conventional loans won't approve your fix-and-flip property or your 1099 income without two years of tax returns.
DSCR loans work better for pure investment properties where rental income covers the payment. Portfolio ARMs make sense when you're owner-occupying a mixed-use building or need personal income to qualify.
Bank statement loans offer fixed rates while portfolio ARMs adjust. If you're self-employed and want payment certainty, bank statement programs often make more sense despite similar pricing.
Hard money loans close faster but cost significantly more—typically 9-12% rates plus points. Portfolio ARMs sit between hard money speed and conventional pricing.
Sonoma County's unique properties—vineyard estates, ag-zoned parcels, historic downtown buildings—often require portfolio financing. Standard agencies won't touch properties with working wineries or commercial components.
Fire rebuild properties get flagged by conventional underwriters but qualify through portfolio programs if the rebuilding meets current code. Three lenders in our network specifically underwrite fire-affected Sonoma properties.
Santa Rosa's rental market supports strong DSCR ratios, which helps when lenders evaluate mixed-use properties. Downtown apartments above retail commonly generate enough rent to satisfy portfolio underwriting.
Appraisal timelines run longer in Sonoma wine country—sometimes 3-4 weeks for rural properties. Factor this into your rate lock period since portfolio locks expire faster than conventional.
Portfolio ARMs stay on the lender's books instead of being sold to Fannie Mae or Freddie Mac. This means the lender sets its own approval rules and can be more flexible with credit, income documentation, and property types.
Yes, most portfolio lenders accept 12-24 months of bank statements to document income. You don't need two years of tax returns like conventional loans require.
Expect to pay 1-2% above conventional ARM rates. The premium buys you flexibility on credit, documentation, and property type that standard agencies won't approve.
Yes, this is one of the main uses for portfolio financing in the region. Standard agencies won't touch working agricultural properties, but portfolio lenders regularly finance vineyard estates.
Your rate adjusts based on an index (usually SOFR) plus a margin. Look for 2/2/5 cap structures that limit how much your rate can increase at each adjustment and over the loan's life.
It depends on your loan terms. Soft prepayment penalties allow you to sell without penalty but charge a fee if you refinance. Hard penalties apply regardless of how you pay off the loan.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.