Chicago's housing market does not wait for contingencies. Sellers field multiple offers, bidding wars are routine, and a home sale contingency is less a negotiating position than a disqualification.
For move-up buyers who still carry a mortgage on their current home, that reality can be an obstacle. They have the income and equity, but conventional lending was not built for this scenario. Portfolio lending for Chicago move-up buyers changes that equation.
Qualified Chicago move-up buyers can purchase a new home without selling their current home first and without their existing mortgage counting against them. A portfolio lending relationship allows certain buyers to exclude existing mortgage debt from their debt-to-income (DTI) calculation. The requirement is that they have a documented plan to sell within a defined window. This is a legitimate credit decision made by a lender with the authority to make it.
Fannie Mae and Freddie Mac guidelines are built for the standard borrower. When a buyer still has a mortgage on their current home, that payment is included in the DTI calculation. Under agency rules, that math often makes the numbers unworkable, even for buyers who are financially solid and capable of carrying two properties temporarily.
The result is a buyer with the income, the equity, and the intent to sell, who cannot get approved through a conventional path. In a competitive Chicago market, asking for a home sale contingency often leads the seller to look at other offers.
The lender A and N Mortgage works with in these situations holds its own money. It does not sell loans on the secondary market, which means it applies real-world judgment to real-world situations.
This lender reviews the full picture of a borrower's financial profile and assesses the likelihood that the existing property sells within a defined window. The credit decision is based on that analysis rather than on the standard formula alone.
When the math supports the deal and the borrower is qualified, the lender can move forward. The existing mortgage gets excluded from DTI, and the buyer competes without a contingency.
Dean Vlamis has spent more than two decades finding the path when the obvious one is blocked. This is one of the clearest examples of what a lender relationship built over time can actually produce.
"We take it to one of our investors. They look at the deal and say, okay, this makes sense. They assess the market, and as long as the borrower sells the property within six months, they won't count that debt against them. That's almost unprecedented, because that clearly doesn't meet agency guidelines."
— Dean Vlamis, Mortgage Professional and CFO, A and N Mortgage
This is not a workaround or a shortcut, and it is not designed for buyers who are stretching to qualify. Portfolio lending works for buyers with significant equity in their current home and verified income that supports both properties during the transition period. They also need a clear, realistic plan for selling and a timeline that holds up under scrutiny.
Think of the Chicago homeowner in Lincoln Park or Lakeview who bought during a slower market, built up equity, and now wants to move up. They have the income to carry the new payment and intend to sell. But under agency guidelines, every conventional lender is required to count the existing mortgage against them. That makes the loan unsupportable on paper, even when the full picture says otherwise.
"This is a bank that holds their own money. They're not selling off on the secondary market. They look at something that makes sense for them. It's a little common sense. I would imagine this is what mortgages were like before Fannie Mae and Freddie Mac. That human element, saying, 'okay, I know you're going to sell the property.' That's your goal. So we have that."
— Dean Vlamis, Mortgage Professional and CFO, A and N Mortgage
When the existing mortgage is excluded from DTI during underwriting, the buyer qualifies without a home sale contingency. That means they can submit a clean offer under the same terms as any unencumbered buyer. In a market where sellers treat contingency offers as non-starters, this makes a material difference in whether an offer is taken seriously at all.
The CFPB's mortgage resources for homeowners explain standard DTI thresholds clearly, but they reflect the agency world. Portfolio lending operates in a separate lane, legally and structurally. Excluding an existing mortgage from DTI is permissible when the lender holds the loan and has made an independent credit determination.
This is also where timing matters. Once a buyer finds the right home, the timeline compresses, leaving no room to structure a loan from scratch. Reviewing the borrower's full picture in advance ensures the pre-approval reflects the actual lending path, not a placeholder.
For REALTORS® working with move-up buyers in Chicago's competitive neighborhoods, the structure of the pre-approval matters at the offer stage. A pre-approval based on a portfolio review that excludes the existing mortgage from the DTI is fundamentally different from a standard approval letter. It means the buyer can submit a clean offer with no contingencies.
My team communicates directly with listing agents in these situations. The conversation is straightforward: the file has been reviewed, the income is verified, and the structure is sound. That clarity keeps offers competitive and keeps everyone in the deal.
Beyond creating stronger offers, it's part of building REALTOR® partnerships that serve clients well. We touch on some of these issues in my post about what REALTORS® look for in a lending partner.
If your clients have equity and a home to sell, this is not a conversation to have after they commit to a property. Have it now, so they are ready to move when the right opportunity arrives.
The pre-underwriting process A and N Mortgage uses is designed to help these types of buyers. A deep upfront review before the offer is written is what separates a competitive submission from one that needs an asterisk. That process is explained in detail in my post about how pre-underwriting creates predictable closings.
A home sale contingency allows a buyer to exit a purchase if they cannot sell their current home within a set period. In a competitive Chicago market, sellers routinely decline these offers because the contingency introduces uncertainty and delay. With multiple offers available, sellers have little reason to accept conditions that could unwind the deal weeks later.
A portfolio lender retains its own loans rather than selling them to Fannie Mae or Freddie Mac on the secondary market. Because it carries the risk, it applies its own underwriting criteria rather than agency formulas. That flexibility allows it to weigh context, like a borrower's documented intent to sell a current property, when making a credit decision.
It can be excluded under specific conditions. The borrower must have a documented plan to sell their current home within a lender-defined window. The lender must also determine that the overall financial picture is sound. This is a case-by-case credit decision, not an automatic feature of any loan program.
This approach works for buyers with significant equity in their current home and stable, verifiable income. It is not for buyers who are financially stretched or whose credit case does not hold up under full review. The borrower needs to be strong across every other dimension of the file.
Portfolio lenders operate under their own underwriting guidelines, which are separate from agency guidelines. However, their loans are fully legal and subject to federal oversight under CFPB authority. Excluding an existing mortgage from DTI is permissible when the lender holds the loan and makes an independent credit determination. It is an exercise of the lender's own credit authority, not a regulatory exception.
Move-up buyers should start before identifying a target property. Once a buyer finds the right home, the timeline compresses fast. Reviewing equity, income, and the existing mortgage obligation in advance means the pre-approval reflects the actual lending path. Buyers who wait until they are under pressure to move on a property rarely have time to structure the loan correctly.
Not every mortgage company has access to portfolio investors who review files on a case-by-case basis. A and N Mortgage has developed relationships with investors who bring that flexibility. The relationship is what opens the door. Without it, even a fully qualified move-up buyer has no path through the conventional system.
A strong buyer with the wrong loan structure is still a buyer sitting on the sidelines. The agency system serves most transactions well, but it was not built for the move-up buyer who needs to carry two properties temporarily.
If you are working with buyers who have equity, income, and a home to sell, connect with my team. Being structured correctly at the start is what makes the offer competitive when it counts.
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