Refinancing commercial real estate without w2 income

7 Replies

I was wondering if it was possible to do a cash out refinancing for a commercial property without a w2 job. 

For a conventional 30 year residential, this is not possible as banks look at income.

However, I believe this is not the case with commercial? They are treated more like investments. 

Commercial loans don't fall under the Dodd-Frank so you can have loans with no income and no asset verification. It will definitely be a better option for you.

@Alex Silang  - YOu have to prove bank that you have income from other sources and would be able to pay them back. They need income verification and if its from W-2, its pretty straightforward and trustworthy

@Nilesh Makhija That is not true all of the time. There are plenty of lenders who will look past income and focus on the other aspects of the transaction ( LTV, net worth, ect)

If the property cash flows and provides the lender's DSCR, and the LTV is within their guidelines, then you personal income becomes a lesser issue, or a non issue altogether.

@Alex Silang

Being a CRE financing broker, most of the replies above are correct.

There are lenders out there who will provide stated income financing for commercial properties as long as the property cash flow is able to service the debt at their requirements, so your personal income is not required nor even looked at.

just my .02


@Derek Carroll  

@JP Riturban

How do the terms on a stated income loan differ from one that is documented with W2 income?

Originally posted by @Kristin Pavlik:

@Derek Carroll  

@JP Riturban

How do the terms on a stated income loan differ from one that is documented with W2 income?

The rate on a stated income loan will be higher than a conventional loan that requires tax returns and W2's because the lender is taking more risk with these loans. The lenders also control the risk by setting a max LTV of around 70-75% of the purchase price. But it's better option for investors who don't want to have the higher rates or fees of hard money loans.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.