Angel Oak Mortgage Solutions taps into HELOCs

Atlanta-based nonqualified mortgage (non-QM) lender Angel Oak Mortgage Solutions is tapping into the home equity line of credit (HELOC) market amid elevated equity levels. 

Unlike traditional HELOCs that require a homeowner to have at least 20% equity in their home, Angel Oak’s HELOC qualifies borrowers based on trailing 12- or 24-month bank statements and provides a line of credit with no usage restrictions, the lender said.

Angel Oak’s bank-statement HELOC allows qualified, self-employed borrowers to leverage their home equity while maintaining their primary mortgage. Borrowers can qualify for this loan with owner-occupied homes, second homes or investment properties.

“Bringing our new bank statement HELOC product to the market is a testament to our dedication to meeting the evolving needs of borrowers nationwide,” Tom Hutchens, executive vice president of production for Angel Oak Mortgage Solutions, said in a statement. 

“The introduction of this product and the growth of our team position our firm to better support the originators and borrowers we serve while scaling our services to align with the momentum in the market.”

Angel Oak’s HELOC product launch comes amid the still high equity levels across the country.

While overall HELOC loan originations by count were down 7% in the third quarter of 2023 as interest rates spiked, the Federal Reserve reported that outstanding balances on HELOCs increased during this period to $349 billion, up $9 billion from the prior quarter. 

In addition, Fed data shows that outstanding debt linked to home equity products also increased in the third quarter to $501 billion, up 2.3% from $490 billion in the second quarter. 

Angel Oak has originated $9.4 billion in non-QM volume since 2020 and more than $18.6 billion in non-QM loans since the company’s inception in 2013, according to its release.

The non-QM lender expects more growth opportunities in 2024 with the expansion of its team and product offerings. Most recently, Angel Oak brought on six account executives to serve markets including California, Indiana and Rhode Island, the firm announced.