Nathan Rufty is a mortgage coach and trainer with Mortgage Marketing Pros, a company that works with loan officers
to develop marketing plans that increase leads and closed
loans. Mortgage Marketing Pros was created by a producing
loan officer and a master marketer to teach mortgage professionals how to create their own businesses without relying
so much on one or t wo streams that can dry up without
warning. Reach Rufty at (909) 731-1218 or visit
These Niche Loans Can
Bolster Your Business
Originators can stay busy by adding just one or
two specialty financing areas
By Nathan Rufty
Any mortgage originator can offer trad- itional loan programs. Offering nontra- ditional lending can open doors for a mortgage originator to reach a whole
new world of niche borrowers, however.
These programs can include construction, jumbo
and hard money loans. They also could include non-qualified and reverse mortgages, Section 184 Indian
Home Loan Guarantee financing and other specialty
Working these loan programs will make you the
go-to loan originator for many buyers. That could
include an individual looking to purchase a million-dollar property with 10 percent down, a property
investor who needs the services of a fix-and-flip
lender or buyer, or the owner of small storefront looking to buy a mixed-use property in a downtown area.
The lending market is becoming tighter and tighter,
with the refinance market predicted to drop 27 percent in 2018, according to the Mortgage Bankers Association. That means purchase business will become
the dominate program for most companies. Mortgage
originators who can step outside of their comfort
zones can capitalize on niche programs.
The vast majority of alternative-lending programs
are untapped by most lenders and loan officers
because there has been an abundance of traditional
borrowers. As the number of traditional borrowers
shrinks, mortgage originators will need to explore
other avenues to keep their pipelines filled. Be the
first outside of the gate to specialize in one or two of
these niche programs.
See if your company has the ability to lend direct
to foreign nationals, for example, or is able to broker
these loans out. Then, let real estate agents in your
area know that you can help their nonresident buyers.
You also can market your services online by blogging
about the program or creating a video explaining the
benefits of the foreign-national program and uploading it to You Tube.
Another niche area to tackle is the U. S. Department of
Housing and Urban Development’s Section 184 Indian
Home Loan Guarantee Program. This is a home-loan
product specifically designed for American Indian and
Alaska Native families as well as Alaska villages.
A program that can yield two loans with one buyer is a
construction loan. Help a buyer with the construction
loan to build an owner-occupied property. Four to six
months later, once the property is completed and the
local building department has issued the certificate
of occupancy, you can have the permanent loan
already processed and ready to close in order to pay
off the construction loan.
Imagine having six to eight construction loans in
process within a six-month period and then have those
same buyers doing another loan with you for the permanent financing. That’s to 12 to 16 additional loans
When it comes to rates on jumbo-loan programs,
nondepositary direct mortgage bankers cannot compete with depositary banks. If you are in a market that
supports loan sizes over $424, 100 — the loan amount
that typically qualifies as a jumbo loan — you may need
to rethink the company you are working for if your rates
are not competitive enough to gain market share in
the jumbo space.
The bigger banks have staked out the market for
those higher-end buyers where most mortgage bankers and originators cannot compete. If you decide
to make a switch to a different company where your
business can grow with the jumbo market, make it on
The mortgage industry goes through its highs and
lows in terms of interest rates, programs, loan limits,
underwriting guidelines and technology. Make sure
it benefits your business if you make a move to take
advantage of jumbo and traditional loans.
Another niche program, one that hopefully will
be around long after we retire from the mortgage
industry, is the reverse mortgage loan. Most of us
are hoping to retire after 62, but life expectancy was
78. 7 years in 2011, according to the Huffington Post.
There will be a market of homeowners looking to tap
into their home’s equity to be able to manage the daily
cost of living on a fixed income after retirement.
Expect the mortgage industry to go through ups and
downs. Prime programs, such as conventional loans
or Federal Housing Administration or Veteran Affairs
mortgages, will always attract a crowd. Alternative
loans will always be a secondary focus for most mortgage originators. Break out of your comfort zone and
add just one alternative-lending program for now. That
will give you time to understand, market and process
that particular loan to ensure you grasp the program.
Alternative-lending programs can be very profitable
for an originator who promotes them in their local
area to real estate agents and buyers. That originator
could become the only professional to turn to for that
The first step is to pick a niche you will enjoy
working with, and see if your company has the ability to close that loan. If so, learn the product’s guidelines. Then promote your services to local real
estate agents who have buyers that will fit into your
Continue promoting your knowledge about the
program by writing for blogs, uploading videos and
reaching out to the community through social media.
When a borrower searches online for a loan program,
your name should be the first one to show.
There is a big world out there known as alternative
lending. Taking a risk by jumping into that arena can
lead to big rewards, but you have to be willing to step
outside the box of traditional loan programs. ■
For more articles on niche loans
View these articles and more at
“Global Lending Is Within Your Grasp,”
“HECM Is Going Mainstream,”
“Prepare for Nonprime,”
Denis G. Kelly,