BayFirst Financial Corp. announced that First Home Bank (d/b/a BayFirst Bank), its wholly-owned subsidiary, has launched LoanBud, a lending division designed specifically to serve self-employed homebuyers and small business owners across the U.S. LoanBud provides the option to qualify for a mortgage loan without tax returns and underwrites each self-employed borrower's income before providing a pre-approval letter.
LoanBud also offers government-backed Small Business Administration (SBA) loans up to $5 million – making it a one-stop shop for entrepreneurs, freelancers and business owners looking to get the home and business financing they require. This division is the first of its kind for the Bank as it combines both residential and small business lending services, creating synergy between two typically separate lines of business.
“As a nationwide lender focused on assisting those facing unnecessary challenges in their pursuit of financing, we are proud to now provide a comprehensive solution for self-employed individuals looking to buy a home or grow their business,” said Anthony N. Leo, CEO of BayFirst. “When it comes to residential mortgages, lenders don't thoroughly review self-employment income documentation up front and many self-employed homebuyers who receive a pre-approval letter are later denied a mortgage. As the future of work changes, more homebuyers are being impacted by lenders who base mortgage approval on tax returns only. LoanBud is proud to serve as a residential mortgage lender that gives self-employed homebuyers the tools and resources to make smart homebuying decisions and secure a mortgage, while also supporting their businesses through SBA lending.”
More than one in three workers, 53 million people, are part of America’s independent workforce, according to a study from UpWork. In a new survey from LoanBud conducted by Pollfish, 53% of self-employed home buyers reported having trouble securing mortgage approval because of tax return requirements, with 63% saying they wished lenders offered additional qualification options. In addition, half of the survey respondents received pre-approval from a lender based on self-employment income information that was later denied.
“LoanBud is solving two major problems for self-employed homebuyers seeking a mortgage. First, we offer the option to qualify using bank statements or 1099s instead of tax returns. Second, whether they use tax returns or alternative documentation, we underwrite each applicant’s income up front, giving our customers confidence that their loan will close once they find a home to purchase.”
Burke Purcell, Director of LoanBud
Business owners, freelancers and entrepreneurs face unique challenges seeking approval for a home loan because most banks still qualify people based on the net income reported on tax returns after deductions and write-offs. LoanBud offers more mortgage options, including qualifying using bank statements or 1099s instead of tax returns. Its lenders are trained to understand the income of self-employed borrowers seeking assistance with buying a home or obtaining a small business loan, saving them time and money.
The launch of LoanBud further solidifies First Home Bank’s commitment to serving every member of the community as it positions the Bank to better support a wide range – and growing number – of self-employed professionals who might otherwise be denied access to the capital they need to realize the dream of home and business ownership.
LoanBud is a division of First Home Bank. LoanBud’s mission is to become the number one lender in the country for self-employed people by providing mortgages and SBA-backed loans to entrepreneurs, freelancers, and small business owners.
About BayFirst Financial Corp.
BayFirst Financial Corp. (f/k/a First Home Bancorp, Inc.) is a registered bank holding company which commenced operations on September 1, 2000. Its primary source of income is from its wholly owned subsidiary, First Home Bank d/b/a BayFirst Bank, which commenced business operations on February 12, 1999. First Home Bank is a Federal Reserve member and a state-chartered banking institution. The Bank operates seven full-service office locations, 23 mortgage loan production offices and is in the top 25 by dollar volume and by number of units originated nationwide through the second quarter ended March 31, 2022, of SBA's 2022 fiscal year. BayFirst Financial Corp., through the Bank, offers a broad range of commercial and consumer banking services including various types of deposit accounts and loans for businesses and individuals. As of December 31, 2021, BayFirst Financial Corp. had $917.10 million in total assets.