The HMO product is aimed at limited company landlords and landlords with at least 12 months of homeownership experience to mortgage or remortgage on new and existing HMOs of up to six bedrooms.
This is provided the property is appropriately licensed at the time of completion.
The firm said it was “responding to a gap” in the specialist lending market as landlords are looking to “expand and diversify their portfolios”.
The HMO product is available on portfolios up to 10 properties, with pricing starting from 5.19% with a maximum loan to value (LTV) of 75% on properties with an Energy Performance Certificate (EPC) between A and C.
The affordability assessment is based on rental income receivable from the property and there is no need to provide personal or business bank statements as proof of income.
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Pepper Money accepts multiple sources of funds to pay deposits, including gifts, director loans and existing equity.
Credit scores are also not used as part of the assessment.
Pepper Money also has a manual approach to underwriting and has terms of up to 35 years with a maximum age of 85.
The lender recently re-entered the buy-to-let (BTL) market, having been out for nearly three years.
Paul Adams (pictured), sales director at Pepper Money, said: “Our new HMO product is the latest in a series of new developments centred around supporting landlords.
“As a specialist lender providing specialised products, we know that landlords are operating within an increasingly complex regulatory environment and navigating affordability challenges, which are affecting their behaviour.”
He continued: “While traditional credit checks are valuable, our approach offers a broader view of financial health, promoting responsible lending and renting practices. HMOs play a vital role in the UK’s private rental market, offering an affordable and accessible option in the face of rising rental demand and a growing gap between the amount of supply available. Landlords are an essential part of a viable property market, and our latest product offering aims to provide specialist solutions to help landlords remain in the market.
“Pepper Money is committed to developing a broad range of products and services and working collaboratively with brokers, with a streamlined underwriting process, delivering competitive rates and high-quality service for a section of the market that is so often overlooked by high street lenders.”
