A "Stated Income Loan" is a loan program that does not require borrowers to document their source of income with pay stubs, 1099s, or 1040 tax returns to the lender although they declare it on their application.
Borrowers simply state their income on the loan application and underwriters will review the file based on the borrower's credit score, assets, bank statements, and occupation type. Some lenders refer to this loan type as a No Income Verification Loan (NIV).
EXAMPLE - let's say an owner-occupant applies for this "low doc" loan. They can purchase a $1,000,000 home with 25-percent down or refinance a $1.3 million single family residence with 30-percent equity and subject to approval by underwriting.
Are These Loans Available in My State?
This loan is available for primary residences in major metropolitan areas such as Los Angeles, Orange County, San Diego, Santa Barbara, San Jose, Sacramento, and San Francisco as well as Orange and Riverside counties. California and also in Colorado, Florida, and Texas.
BORROWER MUST BE:
- Self-employed or Salaried - minimum 2 years self-employed at same location or explain move
- Can be a home-based business with a business license
- Ineligible - No First-time home buyers
- Current job position must match and be verified on credit report, Lexis-Nexis or other method
ADDITIONAL REQUIREMENTS:
- Business License (if self-employed/1099) ....OR
a CPA / Tax Acountant to verify 2 years of self-employment at the same location. - Salaried or W2 borrower okay with written verification from employer.
- Reserves are not required but it helps if you can show them
- Gifts are OK up to a maximum 50% of down payment
- 2 months of personal bank statements. No NSF's or overdrafts
CREDIT Requirements:
— In summary, you need to have great credit for the last 5 years which includes a mortgage for 2 years.
- 680 Minimum FICO scores?
- Twenty four (24) month recent mortgage history
- 3 credit tradelines (credit card, auto loan or mortgage) with a twenty-four (24) month history; 1 with 5 year history (open or closed)
- No Foreclosures, Short Sale, or Bankruptcy in the last 5 years
- No charge offs, collections, or tax liens in last three (3) years
Owner Occupied Property Transactions:
75% financing on Purchases
70% financing on Refinancing
LOAN Terms
- $300,000 minimum loan amount up to $5M
- 7-year fixed ARM and 30-year fixed loans.
(30-year fixed term or 7 years fixed rate, then for 23 years it will be adjustable.) - Rates start at 7.25%
- ARM Margin starts at 2.95 to 3.5 [#CNP]
- No Prepayment Penalty
Last updated Dec. 2023. Under this program the borrower(s) does not submit IRS form 4506-T to the lender so no copies of your filed tax returns or transcripts are provided.
Alternatives to Stated Income
If you are NOT eligible for the program above, see if you qualify for the 12- or 24-months of bank statements mortgage program where no tax returns and no 4506-T forms are needed.
If your income is low on your 1040's 2 years ago, but this past year it is higher, see if you qualify for the 1 Year Tax Return where the lender only reviews a copy of your most recent filed tax year. (click here)
Finance your 1-4 unit Investment Property without your job or income disclosed.
Qualify based on income of subject property
(click here and go to "investors" tab)
NOTE: The terms and conditions are not flexible. If you dont'meet these conditions, you should look into the bank statement program.
* NOTE: Loan programs are subject to change without notice. We are not a lender. We simply display popular loan programs that mortgage companies are utilizing in the ALT-A market.
Related Information
Fed’s statement on Subprime Mortgage Lending and the impending problems it creates.
Find a Commercial Mortgage without income documentation for your cash flow generating property such as an apartment building, office building, and retail properties.
