The Reversed Conventional Mortgage is ML Systems' proprietary loan product that inverts the traditional mortgage payment structure. Instead of paying mostly interest in the early years, 100% of every monthly payment goes directly to principal reduction. Interest accrues separately as a deferred liability. This means homeowners build equity from day one at a dramatically faster rate than conventional mortgages.
In a conventional 30-year mortgage, roughly 80% of early payments go to interest. With the RCM, every dollar of your payment reduces your principal balance immediately. Combined with ML Systems' construction cycles that add approximately 9% property value per cycle, homeowners experience compounding equity growth from both the payment structure and physical improvements.
Monthly payments are calculated using the same standard amortization formula as a conventional mortgage, so the payment amount itself is familiar and predictable. The difference is in how that payment is allocated: 100% goes to principal rather than being split between principal and interest. Your payment amount depends on the loan amount, term, and rate, just like any mortgage.
Interest accrues monthly on the remaining principal balance and is tracked as a separate deferred liability rather than being collected from your payment. When you make overpayments beyond the required amount, those extra funds are applied to accrued interest first, then to additional principal reduction. This structure ensures your core payment always builds equity.
Yes, existing homeowners with conventional mortgages can refinance into an RCM. The process involves a standard refinance evaluation including property appraisal and credit review. The RCM is particularly beneficial for homeowners entering the ML Systems construction cycle, as the equity acceleration compounds with the value created through deconstruction and rebuilding.
The RCM uses a tiered credit system that adjusts payment allocation structures based on your credit profile. The specific credit score requirements vary by tier, with different overpayment modes available at each level. Standard tiers use monthly payments with three overpayment options, while preferred tiers offer daily payment streams. Contact ML Systems for current tier requirements.
The RCM is currently designed for primary residential properties within the ML Systems construction ecosystem. The loan product is optimized for the closed-loop value chain where loan origination, deconstruction, and construction work together to maximize equity growth. Investment property lending may be considered in future product expansions.
Down payment requirements for the RCM follow industry-standard guidelines and depend on the loan amount, property value, and borrower credit profile. ML Systems works with partner lenders during the initial phase to process applications, with the goal of transitioning to in-house lending as operations scale. Down payment assistance may be available through programs like RIHousing DPA and FHLBB AHP.
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