With mortgage rates expected to remain flat for the foreseeable future, lenders of all sizes are looking for creative ways to attract creditworthy borrowers who may not fit into the conventional lending package.
Below are four trends that will allow lenders to expand their reach to new borrowers in 2026:
Non-QM loans are becoming mainstream
A big story in 2025 was the growth of non-QM lending, but many of the companies offering these products were small and mid-sized lenders. Now, some of the industry’s biggest players are willing to play a bigger role in serving borrowers who may not meet traditional credit requirements – such as self-employed people, real estate investors and even influencers – but have good credit scores, a low debt-to-income ratio and the ability to make significant down payments.
As the pool of qualified non-traditional borrowers continues to grow, there are some areas of concern in this sector that the industry will need to focus on. These include the growing prevalence of consumer “shadow debt” (debt that is not reported to credit bureaus), such as buy now, pay later and cryptocurrency, which will become a crucial part of loan origination for many lenders by 2026. More attention has also been paid to the default rates of non-QM loans, but in reality they are largely comparable to the conventional sector.
VantageScore and FICO 10T are gaining popularity
Parallel to the growth of non-QM loans, new credit scoring models VantageScore 4.0 And FICO score 10T will be embraced by the industry. As more lenders recognize the need to help identify creditworthy, non-traditional borrowers by providing a more accurate picture of their income and ability to repay loans, adoption of VantageScore 4.0 and FICO 10T will increase as an alternative to standard credit reports. This, in turn, will enable further expansion of the non-QM lending sector, ultimately leading to increased homeownership across the U.S.
Mortgages with a term of 50 years are becoming a reality
In certain parts of the country, many potential starters cannot buy a home due to high interest rates and rising purchase costs. By introducing a conventional 50-year mortgage product and rolling it out to consumers, a new class of buyers will have the opportunity to enter the market and build equity, rather than renting for life. The current government sees this potential and will be motivated to act on it, especially once the wider industry comes on board.
Some critics of a 50-year mortgage argue that it would not allow homeowners to save a significant amount on their monthly payments, while at the same time burdening them with long-term debt. However, it’s important to note that the average time people in the U.S. own a home before selling it is just 11 years, according to the NAR 2025 Profile of Home Buyers and Sellers. Furthermore, if history is any indication, 50-year mortgages will have a positive impact on the market. When 30-year term products were introduced, more people could gain access to housing, increasing competition for new and existing housing stock and ultimately leading to an increase in value.
DSCR investor pool is expanding
According to U.S. Census Bureau estimates, there are roughly 62 to 65 million people in the U.S. between the ages of 20 and 35, which has historically been the best age range for buying a home. While almost all younger adults would like that ever own a housea reduction in available inventory, the inability to create new housing in certain markets due to zoning and other challenges, and an overall lack of affordability have made ownership increasingly difficult to achieve.
This dynamic is fueling a strong market for investors with the capital to upgrade and expand the number of available rental units in existing apartment buildings. These investors are increasingly turning to DSCR (Debt Service Coverage Ratio) loans to help them close deals faster than would be possible with traditional loans. They are also attracted by the fact that the product uses expected real estate cash flow to determine whether to grant a loan, as opposed to the personal income requirements required for a traditional loan. Larger lenders have recognized this trend and are poised to jump more fully into the DSCR market in 2026.
At the same time, there is a growing risk of occupancy fraud associated with DSCR loans, including recent examples of investors overinflating rental estimates to increase the perceived value of their properties. This will lead to increased supervision from the lending sector and a greater focus on determining the true rental value of a property.
While 15-year, 30-year and other conventional mortgages will continue to make up the majority of home loans for the foreseeable future, the floodgates are opening for lenders to offer more creative solutions to expand the borrower pool and help more Americans start their journey to homeownership.
Roby Robertson is EVP of Origination Technology Strategy at LoanLogics, a leader in lending technology for the mortgage industry.
This column does not necessarily reflect the opinion of HousingWire’s editorial staff and its owners. To contact the editor responsible for this piece: [email protected].
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