Non-residents drive $60m for funder in six weeks

by Miklos Bolza02 Nov 2017
Financial services fund house AAFH Capital has approved $60m of loans in its six weeks since establishment with high foreign demand for property driving these figures.

The firm launched in September this year and has since brought in more than 100 loans mostly introduced through non-resident borrowers, foreign investors and Australian expatriates seeking to settle their off-the-plan purchases or enter the Australian property market.

AAFH uses a warehouse facility with an institutional funder to provide loans to all postcodes across Australia. The firm has also signed up with My Local Group and is in discussions with several mortgage aggregator partners and brokers to distribute its products through the third party channel, managing director Nolan Leo told Australian Broker.

To minimise risk, he said the firm conducts a thorough check of client income, verification of identity through the IDme app, and a company search both locally and overseas.

Demand has spiked because of changes in foreign lending and LVRs which have turned the tap off for non-residents at the major and non-major banks and caused difficulties for mortgage brokers with foreign clients.

Leo said that more than $20bn was needed within the next three years to fund loans for foreign lending.

“The current market is well underserved with no lender in the market offering long-term solutions. Some lenders provide options of one to five years and a rate payable exceeding 7-12%.”

AAFH on the other hand offers a 30 year loan term and an LVR of up to 70% with an interest rate under 7%, he said. Conditional approval lies within 48 and 72 hours while formal approval occurs within two to three weeks from valuation.

While AAFH is new to the Australian market, it already has offices in Hong Kong, Kuala Lumpur, Singapore, Dubai and Shanghai.

Leo said that the firm has secured a large initial tranche to lend and additional commitments in terms of additional tranches to satisfy any upcoming demand.

“We have set up an operation centre in Melbourne to handle incoming enquiries and are rolling out to select aggregator groups initially.”

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