[Update 1: An earlier version stated Athas requires a 30% loan-to-value. Actually the firm requires 30% down payment and a 70% loan-to-value to qualify.]
Athas Capital Group is taking one of the first strides back into the subprime market, unveiling a new product that allows credit scores as low as 550, the mortgage firm announced.
The subprime market fizzled out after the housing market crash in 2008, but some lenders are starting to dabble in the market again.
According to Athas Capital, it will offer borrowers with a 550+ FICO score a residential sub prime product.
However, in order to buffer the risk, the firm does require a 70% loan-to-value ratio at such low credit scores.
Meanwhile, if the borrower has a 660+ or 720+ FICO, they are able to receive a 80% LTV.
In addition, the rates begin at 7.5% and require a debt-to-income ratio from 50% to 55%, the firm said.
Currently, Athas Capital will offer the product in California, Arizona, Oregon, Idaho, Colorado, Utah and Texas.