I am a mortgage lender and have a client that would like to refinance her home into her own name due to a divorce. She is a nonprofit business as a midwife, but operates under a private ministerial association. She does not file taxes. She does not get a W-2, 1099, or 501 C3. Who can lend for her?
Chrissy, she's not going to fit anything agency since there's no tax return or 1099 to document income. I'd go straight to non QM lenders. A 12 or 24 month bank statement loan can work if her ministry money lands in the same account consistently. They average the deposits and knock off an expense factor, usually around 50 percent for self employed.
If she has decent savings or retirement money, asset depletion is the other route. The lender takes her liquid assets and divides them over a set number of months and treats that as income. Either way expect rates roughly 1 to 2 points over conventional and most want 20 to 25 percent equity left after the buyout.
Small local banks and credit unions that keep loans in house will sometimes do a one off if she's been banking with them for years. And get the divorce decree in hand early, lenders usually want to see the refinance requirement and the buyout amount spelled out in it.
Jumping in from the agent side of the table, Chrissy — divorce buyouts come up in my business too, and the biggest mistake I see is the timeline. The refinance should be squared away before anyone sets a closing date, because nontraditional income always takes longer to underwrite than borrowers expect.
Two things that help from my side: get the divorce decree in hand early, since lenders will want to see the refinance requirement and the buyout amount spelled out, and keep every document she can find about the ministry income — deposits, association records, anything showing consistency. Paper trails matter more than most people realize.
And loop in a local lender who works with nontraditional borrowers now, not after the paperwork is drafted. Has she started that conversation yet?
Chrissy, checking around before you tell her yes is the right instinct with income this unusual. One thing worth ruling out early so she doesn't lose weeks: the DSCR and private money lenders I shop only do non owner occupied, business purpose loans, so a buyout refinance on the home she lives in isn't something they can do. Which kind of loan a deal belongs in comes down to who lives in the property and what the money is for, not how the income gets documented. Is she living in the home now, or has she already moved out and plans to rent it?
If it's consumer and falls under CFPB/TRID jurisdiction, then it's all going to come down to credit score, equity, and perhaps cash reserves. What state is she in? Are you and your company NMLS-licensed? If so, you might use Change Wholesale's Community Mortgage product. She'll need solid credit (minimum 680) and 20-30% down. The rate's not going to match Fannie/Freddie (probably in the mid-9%s), but if she can't show income, that might work for you. Good luck to you.