Stated Income Loans

12 Replies

Are there any stated income loans out there? I have a client that wants to buy a new home, he owns a business and several residential properties (free and clear). He does have a lot of write offs, so his income at the end of the year is low. He has about 45% down on a $350,000 purchase. I've looked for Owner Financed properties but haven't found a seller that would participate. I'm in California. Any suggestions?

I'm in the same boat, so asked a buddy of mine that manages a mortgage brokerage if they were any liar loans available yet, he said not that he knew of...

If his credit is good he might can do a small bank portfolio type loan. Maybe HELOCs on his paid for stuff to get the cash. Other option is to do a short term private lender loan to purchase and do a HELOC to pay off the lender after it closes.

If he wants to get adventurous, he could market to foreclosures and find a sub2 deal, but that takes some effort and time.

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If there were any stated income loans it wouldn't make any difference as the ratios are still necessary to qualify, unless he lied, are you suggesting your client should lie about his income and get tagged for mortgage fraud? Doesn't matter if he can make the payment and other things happen that can uncover falsifying loan applications.  

Borrowing on the other house adds debt. Using more collateral won't help in residential secondary market loans or in a portfolio loan where the lender uses such guidelines. A hard money lender may take additional collateral, they loan short term so later on when your "client" needs to refinance, unless they cure the ratio matter, they will still be in trouble possibly losing both properties.

Seems what you're saying is that he misses qualifying by an amount equal to what a tax deduction may have added back, I'd think that isn't the whole story as there are usually higher priced loans that can cover that.....you might try other lenders. If he can't qualify he can't qualify......I always liked to know my buyers qualify before I show them a property. Why not sell a house he can qualify for?

Minh,

I see you're in California do you have lender you work with that does no doc with 40% down? If you do, would you mind sharing his contact info? You can send me a private message. Thanks!

@Phil Sotelo  

Many of my clients are from China and thus have little to no credit and harder to verify income. My client owns two homes outright and refinanced one of them to purchase another house. Try Cathay Bank or East West. These banks cater mostly to foreign people and we have been able to pull out 50% of a home's equity without showing income or credit.

You can talk to a more flexible lender about qualifying him on the pure income from his last 24 months bank statements.  There are lenders out there that will qualify his income based on that average.  Good luck!

There are lenders that would do 70% LTV and have a minimum credit score requirement if you were looking for a type of stated income type loan. If your clients need the money right away, then they could look into hard money lenders. There is a directory of hard money lenders in the resource tab.

Greetings Phil,

Does the client have a good amount of equity in their rental portfolio? You had mentioned the rental portfolio is owned free and clear.  One suggestion would be to find a asset based lender and refinance cash out of the rentals and use this to buy the primary residence?

In traditional banking, personal debts are counted against you, but in the asset based lending world, we only care about the cash flow of the asset, fico score and loan to value.

Hope this helps.  Please let me know if you have any further questions.

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