How one lender is innovating to make affordable housing more accessible

Change is five years into its mission as a Community Development Financial Institution (CDFI), a mission that has seen Change soar to become the nation’s largest non-QM lender. Change Chief Production Officer Jon Irvine describes how the company plans to navigate the next five years amid higher interest rates, a growing affordability crisis and other macro-economic headwinds. 

HousingWire: How do you view the lending landscape for 2024? The 10-year Treasury is about 5%, which is not outrageous by historical standards, but given that rates were half that amount a short while ago, borrowers may have different expectations. How do you overcome that?


Jon Irvine: We view 2024 very favorably based on several positive economic indicators we saw at the end of last year. The economy was expanding, people were working, inflation was cooling and consumer sentiment was rising. The 10-year Treasury closed 2023 below 4% (3.87%) from more than 5% just a month earlier. To the buyer of an $800,000 home putting down 20%, the mortgage savings would be roughly $500.

Granted, mortgage rates aren’t at their pandemic lows, but historically they are in line with what homeowners have typically paid. 

If buyers try to time their home purchase to the return of record-low rates and the historically low rates don’t return, their wait could prove costly. Since 2000, the average home appreciation rate has been 4.7%, according to the FHFA. Since 2012, the average rate has been 7.7%. A $500,000 home that appreciates 5% a year would be worth more than $1.3 million in 20 years.*

HW: There’s a growing affordable housing crisis in the U.S. As a major lender, what role do you see Change playing in making housing more affordable and more accessible to more people, especially in underserved communities?

JI: The short answers are innovation and education. By developing innovative products built around how people today live and work — as self-employed workers, contractors, business owners and so forth — and by demonstrating to the capital markets that these non-QM loans consistently perform at a high level, we can recycle that capital into more markets, including traditionally underserved markets. If consumers, Realtors and builders know affordable financing exists for potential buyers, more Americans will have the opportunity to get into a new home.

HW: How did Change become the nation’s No. 1 non-QM lender?

JI: We knew consumer demand would be there if people knew about our products. The easiest way to build that awareness was to build a robust lending platform. We also have been able to educate the capital markets, which helped to scale the financing, gain high rating agency acceptance and create significant investor demand. The continuing performance of these loans is a testament to the quality of our borrowers and our catalyst to serve even more communities.  

HW: Can your model of doing well as a company and doing good for the community thrive in 2024?

JI: In 2023, the same year we saw the Fed raise interest rates three times, we also became the nation’s largest non-QM lender, proving we can do well for the company and the communities we serve in any lending environment. Driven by our community development mission to create lending solutions for how people live and work today, we’re always going to be relevant.

Likewise, as investor awareness of our products continues to increase and as rates steady or begin to fall, we anticipate demand for the adjusted-risk returns these products produce will be too good to pass up.