How local knowledge can help brokers avoid these headwinds
Multifamily mortgages have been a strong segment for the non-QM market in 2025. However, there have been some challenges in the space as well.
One of the more well-known issues is fraud in certain areas of the country. Valuation challenges are just one of the issues brokers need to focus on, according to one executive.
Benn Jackson (pictured top), vice president of wholesale lending at Constructive Capital, said that while some areas of the multifamily space are doing well, others are facing more challenges as the year wraps up.
“We've seen some headwinds around multifamily,” Jackson told Mortgage Professional America. “These types of trends sometimes don't make a whole lot of sense. We’ve seen more focus on 1-to-4 unit, and that business is accelerating. Also, the RTL business has future potential. But I would say, like the 5-to-8 unit, anything above four units definitely presents some challenges.
“And then, on top of that, there are some regional challenges now based on valuation questions on the East Coast. With valuation in general, it’s making sure that everything is above board, as opposed to some of the stuff over in Baltimore specifically.”
Knowing the valuations
Jackson said one way to stay ahead of potential fraudsters is to have extensive experience in a particular area. That way, if a valuation is out of line, it would immediately raise red flags with both brokers and lenders.
“Operationally, I think maybe a way to stay ahead of it is to know what the predominant valuations are in these areas,” Jackson said. “We've done thousands of loans in these metropolitan areas. So if the predominant value, let's say in Philadelphia, is $375,000, if you're seeing an appraisal come in at $800,000, you probably should take a closer look and figure out what's going on.”
Jonathan Hornik of the NPLA says the new watch list will help lenders share information and root out fraudsters. As private lending expands, this collaborative approach aims to raise standards and protect businesses from risk.https://t.co/vJAYgJvMfd
— Mortgage Professional America Magazine (@MPAMagazineUS) December 4, 2025
When discussing high-value investor loans, brokers and lenders must take extra care to ensure the investor receives a good loan. That’s why having experience in a particular market and being cognizant of potential issues before the loan closes is critical to keep a good relationship with those investors.
“Looking into the loan performance is something we value quite highly,” Jackson said. “At the end of the day, loan performance is really what matters to the end investor. Being able to put together tranches of loans that perform incredibly well is really what we offer. The ability to have an understanding of these markets and the values there, and having a seasoned underwriting team that also understands the risks around that is a strong value that we are able to provide.”
Exploring non-QM lending
Non-QM products are expanding rapidly, even outside the traditional non-QM lenders. Rocket Pro recently announced a DSCR loan for its customers.
For brokers who want to explore non-QM in 2026, Jackson said it’s important to do your homework to find the right lender that offers the lending products your business needs.
“The industry is moving fast,” he said. “You need to get in and do the research. Get yourself informed and build relationships. Our industry is built on trust, and the sooner you can start building those relationships and building the trust, I think that is going to help reach the next level of success.”
Jackson also said it is essential for brokers to build a diversified network of partners so that their earnings foundation is strong even if some sectors face headwinds.
“What we're all about is strong partnerships, transparent communication, and creating value for clients,” he said. “There's not a bad time to jump in. Also, you want to have diversified capital partners. You can't put all your eggs in one basket. You need more than one partner, because not every lender can do everything.”
Even after diversifying your partners, Jackson said there is an advantage for both the broker and the end customer to have one strong partner to work with. That partner will be more likely to help with difficult files if you send them a lot of business.
“I think you want to lean in toward your trusted and bigger partners,” Jackson said. “If we work with a broker and they're sending us the majority of their loans, we're going to really focus on that relationship and being able to get back to them faster. There is more responsiveness, more transparency, and more ability to work with them if an exception is needed to get a file closed.”
When trying to find the right non-QM partner for your loans, Jackson believes it is important not only to check their numbers but also to meet them at trade shows to really start building a personal relationship.
“Look at the stats and see who's doing the most business,” he said. “Also, when you go to these conferences, see who's responsive and who's not, and start there. I think at that point you can dig deeper into the relationships.”
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