LoanDepot and OfferPad are forming a joint venture that will broker bridge loans to consumers who otherwise would have trouble getting financing for a home purchase before a sale clears.

"Typically the issue they run into is getting a new mortgage while they still own an old home. Because of the debt-to-income calculation, most folks won't qualify when they have two mortgages," said Rick Calle, executive vice president and chief strategy officer at loanDepot.

"It's one of the biggest pain points," he added.

Despite tight home inventories in many areas, sales delays have increased slightly in recent months.

Rick Calle
Rick Calle is executive vice president and chief strategy officer at loanDepot.

OfferPad Home Loans, which is on track to get underway in the first quarter of next year, will be a separate company based in the Phoenix area.

The joint venture could mark loanDepot's first substantial involvement in bridge financing of this type, something it has only experimented with to date. The specifics of the bridge loan structures have yet to be determined, according to Calle.

LoanDepot will fund the bridge loans made to users of the online home sales website as well as permanent financing for the purchase of the consumer's new home. The bridge loans would be loanDepot products. The end-loans could be more mainstream loans such as agency products.

The lender plans to model OfferPad Home Loans after other joint ventures it has formed with homebuilders over the past several years and carefully vet it for compliance with all applicable rules and regulations, particularly the Real Estate Settlement Procedures Act.

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