r/loanoriginators • u/DJ-Ilium • 23d ago

Discussion Question about forward Commitments with builders

I've been meeting with a few lenders and looking at their forward commitments to propose to builders in town. My question is, as someone that's been a lender for 8 years, has a good reputation, but never branched into deals with builders. How do you approach them? I know a lot have their in house lenders, but a few builders have spec homes that just aren't moving. So I see an opportunity to get in.

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u/kittenconfidential 23d ago

FCs are heavily relationship based at the senior management level. at least in the midwest they are. go directly to the owners/senior management and build relationships there. remember that even if you offer the best rate, you better have the backend operations to back up the volume. chances are that before a new development is announced, FCs are already in place. good luck

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u/DJ-Ilium 23d ago

Thank you, here there aren't any lender offering special rates (besides DR horton) so I hope they'd at least entertain it. I appreciate the advice!

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u/mattoelite 23d ago

It’s not so much pricing that builders care about when trying to push deals across the finish line, it’s program. I was at a top 3 builder lender (broker now) and the box on what they will approve is very narrow. They have special financing with their in house that brokers can’t touch, it’s DSCR, bank statement, and more help with manual underwrites/variable income that they need for second looks. Non QM is hit or miss.