Vida Homeloans has announced significant enhancements to its residential lending criteria, increasing the maximum LTV to 90% for Purchase at Undervalue cases, while also broadening its approach to Universal Credit income.
The latest changes are designed to give brokers greater flexibility when supporting customers with a wider range of circumstances.
Purchase at Undervalue increased to 90% LTV
In a significant enhancement to its Purchase at Undervalue criteria, Vida will increase the maximum advance to 100% of the discounted purchase price for landlord-to-tenant purchases, subject to a maximum of 90% of the open-market value. The change will make this type of transaction accessible to more people, as it reduces the level of discount vendors need to give.
For landlord-to-tenant purchases, the customer must have rented the property for at least 12 months. Eligible family transactions include purchases from parents, siblings, children, grandparents, aunts and uncles, cousins, nieces and nephews and certain other qualifying relatives.
The change represents a substantial uplift from Vida’s previous 75% maximum against open-market value. For landlord transactions, Vida is also increasing the maximum against the discounted purchase price from 95% to 100%. Vida also allows any applicable product fess to be added to the loan.
More Universal Credit income recognised for affordability
Alongside its LTV enhancements, Vida is strengthening its income criteria by increasing the proportion of Universal Credit that can be considered for affordability from 50% to 75%, excluding any housing allowance or any child element where the child/children are over 12 years old at application.
Vida is also reducing the supporting evidence requirement from 12 months to three months of Universal Credit award statements, helping to simplify the application journey for brokers and customers. Universal Credit must not be the applicant's main source of income and is assessed individually.
Together, the changes broaden Vida’s criteria across income, higher-LTV lending and non-standard purchase routes, giving brokers additional ways to support customers whose circumstances may fall outside more straightforward lending criteria.
David Angel, Managing Director - Mortgage Product Management at Vida Homeloans, said:
“Our intermediary partners have told us that customers needed more support with undervalue transactions, with family members or landlords not able to give a 25% reduction on the purchase price. So, I’m delighted we’re able to announce the improved policy today, that will give brokers and their clients more options. These changes, together with the improved Universal Credit assessment strengthen our criteria and help brokers support a wider range of customers.”
