Citadel launches 40-year product

by Ryan Smith09 May 2019

With non-QM products continuing to gain popularity, Citadel Servicing Corp. (CSC) has once again expanded its product line.

“We have a new 40-year product,” said Will Fisher, senior vice president and national sales and marketing director for CSC. “We’ve structured it for maximum benefit for the borrower, and to make sense as a loan. We think it’s going to appeal to and benefit primarily investment property borrowers.”

Citadel is offering the 40-year option for both its non-prime and its Outside Dodd-Frank products. The first 10 years of the loan are interest-only, followed by either a 30-year fixed rate or a 30-year adjustable rate, at the borrower’s discretion, Fisher said.

“We’re very excited about it,” he said. “We’ve received great feedback on it, we’re excited to see the impact on loan production at the end of May.”

Fisher said that CSC expects to get the most traction on the product through the company’s Outside Dodd-Frank program, which is primarily an investor-based, “debt-service coverage” ratio payment qualifier, or DSCR.  Additionally, the 40-year program is a great option for many different types of borrowers, he said.

“Your short-term buyers – people who may be transferred somewhere for a few years, but prefer not to rent – they can take advantage of that interest-only period, then sell the property when they move in four or five years,” he said. “If you do the option where you do the first 10 years interest only and then do the 30-year fixed, you’re protected if rates go up. And if you want to pay down the principal faster, you’re more than welcome to. It’s good for people whose pay is commission-based. In months where you experience high commissions, you can pay down principle. In months that are a little leaner, you can pay the interest only payment.”

The minimum loan amount for the 40-year product is $200,000. It is available to all borrowers – wager-earners or self-employed.