Rates and Demand Shape a New Non-QM Growth Path
As 2026 unfolds, angel oak’s hutchens growth in the non-QM lending niche is gaining momentum even with mixed rate expectations. Tom Hutchens, president of Angel Oak Mortgage Solutions, says the strategy centers on broadening nonagency offerings and leaning into a more favorable rate backdrop as the year progresses.
Observers note that non-QM volumes have traditionally represented a minority slice of the mortgage market. In a framework where annual originations run near the $2 trillion mark, the non-QM segment sits around a trillion-dollar-equivalent share before adjustments. Hutchens emphasizes the chance for meaningful expansion even as the macro backdrop evolves in 2026.
Hutchens cautions that the pace of growth will depend on rate moves and competitive dynamics, but he remains confident that 2026 can mark a turning point for non-QM activity. He points to a pipeline shaped by ongoing demand for credit solutions outside standard agency guidelines and a broadening appetite from lender partners for specialized products.
Brookfield Stewardship Accelerates Product Reach
In 2025, Brookfield Asset Management took a majority stake in Angel Oak Companies, the parent firm behind Angel Oak Mortgage Solutions and Angel Oak Capital Advisors. The deal preserves operational independence while underwriting support for a more expansive nonagency suite. Hutchens describes the move as a catalyst for a wider set of non-QM lending options and a more resilient distribution network.
With Brookfield’s backing, Angel Oak has rolled out new terms and products, including longer adjustable-rate mortgages designed to appeal to borrowers seeking predictable payments in a shifting rate landscape. The company’s leadership argues that these options help borrowers who would otherwise be constrained by traditional products, while giving originators access to a steadier, non-QM-aware pipeline.
HELOCs Could Redefine the Non-QM Universe
HELOCs, historically a smaller slice of the non-QM mix, are on track to expand as a share of Angel Oak’s portfolio. Today, HELOCs account for roughly 10% of the book, but Hutchens says demand could push that portion higher, potentially doubling the share over time. The logic rests on a combination of rising home equity and ongoing affordability pressures that push homeowners toward credit lines for consolidation or upgrades.
In an environment where home price appreciation has left many homeowners sitting on significant equity, HELOCs offer a flexible way to finance renovations, debt consolidation, or other large expenditures without resorting to more rigid financing tools. Hutchens notes that higher equity levels create practical incentives for borrowers to explore non-QM HELOC options, expanding the nonagency footprint without compromising risk controls.
Non-QM Growth Comes With a Broader Product Outlook
Angel Oak’s non-QM growth plan hinges on a diversified product set, including five-year and seven-year ARM offerings that broaden the appeal to borrowers who want longer horizons with adjustable-rate structures. The lender has emphasized that such products can better align with household cash flows in a rate-adjusting environment while preserving credit discipline and underwriting standards.
Hutchens says the goal is not to chase volume at all costs but to grow a higher-quality, profit-robust pipeline through a mix of bank and nonbank channels. The strategy stresses strong partner networks and underwriting sophistication that can accommodate a wider array of borrower scenarios, from self-employed borrowers to those with nontraditional income streams.
Channels, Growth, and the 2025 Milestone
Angel Oak distributes its non-QM products through wholesale partners and correspondent lenders, a model that has historically underpinned faster ramp rates and broader market reach. The company reported a notable 33% increase in originations in 2025, underscoring the momentum behind the non-QM expansion and the company-wide push to scale responsibly.
Industry observers say this growth cadence aligns with a broader market trend toward alternative financing as traditional funding channels tighten or move at a slower pace. Angel Oak’s new solutions are designed to complement agency channels rather than replace them, offering lenders a way to serve borrowers who fall outside standard guidelines while maintaining prudent risk controls.
The 2026 Outlook: What to Expect for Angel Oak’s Growth Path
The year ahead is framed by a rate backdrop that could tilt toward easing, which would typically support more refinancing activity and a stable demand for non-QM credit. Hutchens cautions that the path will be shaped by the inflation trajectory, policy signaling, and the pace of rate reductions, but the underlying demand for nonagency credit remains intact among borrowers who need alternative pathways to homeownership or credit consolidation.
While traditional lenders may recalibrate, the non-QM space, led by the Angel Oak platform, looks to maintain a steady tempo with a higher-velocity set of products and a broader partner base. In this scenario, angel oak’s hutchens growth framework aims to blend innovation with risk discipline, offering a credible growth engine for the sector as the market navigates a potential rate-harmonized environment in 2026 and beyond.
Data Points at a Glance
- Non-QM volumes historically around 10% of mortgage originations, with a rough $2 trillion annual total market implying a potential $200 billion non-QM slice.
- Last year’s non-QM volume in the ballpark of $80-90 billion; forecasts for 2026 project roughly $150 billion.
- Brookfield Asset Management acquired a majority stake in Angel Oak Companies in 2025, enabling broader nonagency solutions across subsidiaries.
- Five-year and seven-year ARM products debuted last year as part of the product expansion strategy.
- HELOCs currently represent about 10% of Angel Oak’s portfolio, with potential to double as equity and demand for flexible credit rise.
- Originations increased by about 33% in 2025, signaling strong growth momentum across non-QM channels.
Bottom Line for 2026
Angle Oak’s hutchens growth narrative frames a deliberate expansion in non-QM lending that seeks to capitalize on a more accommodative rate path while sustaining underwriting rigor. The Brookfield-backed push, stronger ARM offerings, and a growing HELOC footprint position Angel Oak to capture a larger share of nonagency lending as households pursue credit solutions that fit evolving financial needs.
For lenders and borrowers alike, the outlook suggests a more robust non-QM ecosystem in 2026, with Angel Oak poised to lead through product diversification, partner collaboration, and a disciplined risk approach that keeps pace with market changes.
Discussion