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Non-bank lender MA Money has expanded its self-managed superannuation fund (SMSF) lending range by introducing near-prime loan options for both residential and commercial properties.
Available from this week (starting 2 November), the new SMSF Near Prime loans provide additional options for SMSF trustees looking to purchase and refinance commercial properties through their SMSF, or refinance existing residential properties (given LRBA lending for residential purchase is now banned).
The near-prime products are available to SMSF trustee borrowers who may not meet traditional lending criteria, including those with arrears (including mortgage arrears up to 1 month within the last six months), credit impairments (including unlimited paid or unpaid impairments up to $3,000 and unlimited impairments over $3,000 when paid in the last 12 months and listed) and discharged bankruptcy (when discharged for more than one day).
The near-prime SMSF loans – which range from $100,000 to $3 million for residential and $4 million for commercial – go up to a maximum 80 per cent loan-to-value ratio (LVR), with interest rates starting from 8.29 per cent for residential loans and 8.79 per cent for commercial loans (for loans with an LVR of 65 per cent or less).
Servicing is all done within the SMSF (i.e. no external servicing), and there is no interest cover ratio requirement for commercial near-prime loans. Additional fees – including legal fees, discharge fees, facility risk fees and annual/monthly fees – apply.
Speaking of the launch of the near-prime SMSF offerings, MA Money’s head of lending, Stephen Begnell, said the new launches aimed to give brokers greater flexibility to support a wider range of client scenarios.
“Our expanded offering reflects the diverse SMSF lending scenarios brokers are managing,” he said.
“SMSF lending can involve complex borrowing structures and property requirements, so having access to a broader range of lending options is important.
“By introducing near prime across both residential and commercial SMSF lending, we’re giving brokers greater flexibility to support clients whose circumstances may fall outside traditional lending criteria.”
MA Money’s national sales manager, Tim Lemon, added: “We know brokers are seeing a wide range of SMSF lending scenarios, and not every client fits traditional lending criteria.
“With the introduction of near prime, brokers now have more options to assist clients with credit challenges, including mortgage arrears, credit impairments and discharged bankruptcy. It’s about helping brokers find solutions for clients who may have previously had limited options.
“This gives brokers another reason to revisit their clients’ existing SMSF residential Loans and explore whether refinancing could provide a more suitable lending solution,” he said.
The non-bank expanded product range comes hot on the heels of the lender lifting LVRs and lending limits across a broad range of products this year. In August, the non-bank announced it had increased the maximum LVR for prime full doc and alt-doc loans up to $5 million from 75 per cent to 80 per cent.
It also expanded its valuation policy to allow automated valuation models for Category 1 properties up to 80 per cent LVR and $2 million, while the maximum loan size for Category 3 locations doubled from $500,000 to $1 million.
Other updates included changes across residential, vacant land, bridging, expat and commercial SMSF lending, as well as income verification and credit policy.
Speaking at the time, Begnell said the changes were designed to give brokers greater flexibility while maintaining a considered approach to credit.
[Related: How the SMSF changes will reshape Australian property]
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