The Bottom Line: Alterra offers low-down-payment loans and considers nontraditional credit and income sources.
Pros & Cons
Offers rigorous, ITIN qualification path for undocumented immigrant borrowers.
Offers a fully digital application process. The mobile app lets buyers, sellers, real estate agents, relatives, title agents, attorneys and appraisers track the loan' progress. Offers Fannie Mae and Freddie Mac Home Path options for low-to-moderate-income borrowers.
Spanish speakers served: website page in Spanish, hundreds of Spanish-speaking employees.
Borrowers can qualify with income from self-employment or seasonal jobs and from non-borrowing, working adults living in the home.
Limited branch locations.
Not licensed in all states.
No home-equity loans and lines (although cash-out refinances are possible.
Alterra Home Loans offers a wide variety of mortgage products that runs the gamut from low-down-payment mortgages for entry-level buyers to conventional loans for the well-qualified borrower.
Another area of focus for Alterra: expanding minority home buyers' access to homeownership through a new pilot program with Freddie Mac.
Since its founding in 2006, Alterra has grown its operations to cover half the country, with the goal of eventually lending in all 50 states, says Jason Madiedo, president and CEO of Alterra Home Loans.
Let’s take a closer look at Alterra Home Loans and its mortgage offerings.
Alterra mortgage products
Alterra’s mortgage offerings come in several options. You’ll find the usual stable of purchase loans for conventional fixed- and adjustable-rate mortgages in loan amounts ranging from $40,000 to $1.5 million.
Additionally, Alterra Home Loans offers mortgages insured by the Federal Housing Administration, the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture; however, the bulk of the lender's government business is FHA loans, Madiedo says.
Alterra doesn’t offer home equity line of credit loans, but it does offer refinancing options across product types, as well as cash-out refinancing, he notes.
The lender is also part of a pilot loan program using Freddie Mac's low-down-payment Home Possible mortgages. The initiative, called Your Path and launched in late 2016, is geared at expanding affordable homeownership to a more diverse group of borrowers.
Alterra Home Loans is adapting its underwriting model to consider borrowers who have seasonal jobs, or who are self-employed. It also aims to make home loans available for multigenerational households where other adult relatives living in the home might contribute to household bills. In other words, Your Path allows lenders to add the incomes of nonborrowing, working adults who live in the home in calculating the debt-to-income ratio in the loan approval process, according to Freddie Mac.
Focusing on minority and first-time buyers
The company’s name, Alterra, means “alter” or “change” in Spanish. And Madiedo sees the company as an agent of change in how Latino and other minority borrowers experience home lending. Hispanics make up 70% of Alterra’s customer base, followed closely by African-Americans and other minorities, he says.
The same issues that may create roadblocks for people in those groups — not having enough for a down payment, not having a long traditional credit history, having an unconventional work situation — also make it hard for many millennial home buyers to break into the market, Madiedo says.
“With Hispanic households, you’ll see grandparents living with their adult children and young grandchildren, and you could have several adults working various jobs to contribute to the household,” Madiedo says. “We’re also seeing a lot more millennials with dynamic incomes besides their day jobs, like driving for Uber or renting out a room on Airbnb. We’re comfortable with serving these consumers the way they want to be served.”
Another way Alterra is serving Hispanics, in particular, is by offering an Individual Taxpayer Identification Number (ITIN) loan product to undocumented immigrant borrowers. Qualifying for an ITIN mortgage product is much more rigorous, because borrowers must have a 20% down payment, have two years of employment in the same type of work and show two years of tax returns using their ITIN number, Madiedo says. The interest rates for these loans are significantly higher, he adds.
When asked if President Donald Trump’s tough talk about cracking down on illegal immigration might impact Alterra’s decision to continue offering the loan, Madiedo says the company is still committed to the program.
“The executive order the administration put out is [aimed at] undocumented people who are criminals,” he says. “The people we’re helping aren’t criminals; we’re not backing out of the program.” Madiedo adds that Alterra has helped nearly 200 undocumented immigrant families attain homeownership.
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How to apply for an Alterra mortgage
To start the application process, consumers visit Alterra’s site to fill out an online form with basic loan details and contact information, and a loan officer calls them back to initiate the loan approval process.
Once the loan file is opened, customers can log in to Alterra’s online loan servicing portal, which is integrated with a new mobile app. From there, customers can track the progress of their loan, upload documents, sign paperwork electronically and have their employment verified online, too, says Walmer Medina, creative director at Alterra.
It takes an average of 27 to 32 days to close a loan through Alterra, Medina notes.
Making lending more transparent, mobile
To appeal to younger, more digitally savvy customers, the company created a new mobile app called Alterra Pronto, Madiedo says.
“Pronto,” which means “soon” in Spanish, makes an online application and loan communications accessible via mobile devices. Another feature: The app brings all of the parties involved — buyers, sellers, real estate agents, relatives, title agents, attorneys and appraisers — together to monitor the loan process until it gets to the closing table, Madiedo explains.
“We want to have as much transparency as possible while reducing friction in communications, and we’re using technology to fulfill those goals,” Madiedo says. “For many millennial home buyers, this is their first experience buying a home, so they might want a parent or sibling to be part of it.”
Alterra wanted to give its customers a way to keep in touch with their loan officer and other real estate professionals in the way they’re used to communicating on other platforms, Medina says. He adds that users can even use emojis on the app.
NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.