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May 1, 2025
Beyond Agency: What You Should Expect From a Lending Partner in 2025
2025 is well underway, and the mortgage industry remains in a state of recalibration. Market volatility, elevated interest rates, and shifting borrower behavior have reshaped how lenders and originators must think about growth. It’s increasingly clear: relying solely on Agency lending is no longer a viable strategy for brokers and correspondents who want to grow.
While purchase activity is showing signs of life in some markets, overall origination volume remains well below pre-pandemic levels. Refinance activity, particularly for rate-term loans, is still limited due to the “locked-in” effect. Over 60% of homeowners have a mortgage rate below 4%, making traditional refinancing and cash-out refis unattractive. Yet at the same time, homeowners are sitting on an estimated $31 trillion in home equity, and demand for access to that equity — through smarter, more flexible lending — continues to grow.
Borrowers are increasingly complex. More than 40% of homebuyers under age 45 reported using at least one form of non-W2 income on their mortgage applications last year, according to CoreLogic. Self-employed borrowers, real estate investors, and clients with layered income sources need alternatives to traditional Agency guidelines. And so do those seeking to consolidate high-interest debt or fund home improvements without sacrificing their first mortgage rate.
That’s why Non-QM and home equity lending have moved from niche segments to essential tools in a modern originator’s offering. Industry forecasts suggest Non-QM originations could exceed $45 billion in 2025, driven by programs like bank statements, DSCR, asset utilization, and expanded-credit options. Meanwhile, HELOC demand continues to climb, with some lenders reporting double-digit year-over-year growth in application volume.
Expanding your product mix is only part of the equation. In a market where borrowers are more selective and timelines are tighter, execution matters just as much. Brokers and correspondents need lending partners who offer reliable turn times, fast answers, and a straightforward process that keeps deals moving. Speed, clarity, and consistency aren’t just advantages — they’re requirements.
At Arc Home, we’re focused on helping our partners navigate this evolving landscape with the right mix of products, support, and expertise. As the year unfolds, those who are prepared to adapt — and aligned with lenders who do the same — will be in the best position to capture what the market has to offer. Let’s move forward — together.
- Brian Devlin, President/CEO