You are identifying this as a specific market segment and pricing it accordingly. As long as all applicants in this class are treated equally based on their risk scores, I do not think you have an issue. However, I would monitor it carefully to assure there is no “flipping”, in other words, the best customers are not being “guided” toward the better program.
What do other BOL users think about this?
Out of curiosity, why would you not want to “risk base” price your direct loan program?
The opinions expressed are mine and they are not to be taken as legal advice.