STATED INCOME LOANS
Primary Residence / 700 CREDIT SCORE
Purchase / Rate-Term / 1 UNIT PUD ALLOWED / SFR
70% LTV /CLTV / MAX LOAN AMOUNT $417,001 – $1,000,000 /
60% LTV /CLTV / MAX LOAN AMOUNT $1,000,001 – $2,000,000
Cash Out / 700 CREDIT SCORE
70 LTV-CLTV / MAX LOAN AMOUNT $417,001 – $1,000,000 400,000
Second Home / 700 CREDIT SCORE / Purchase/Rate & Term 1 / PUD
70% LTV /CLTV / MAX LOAN AMOUNT $417,001 – $750,000
Liquidity – verified
- Loan amount <= $650,000, minimum liquidity = $100,000
- Loan amount >$650,000 to $1,000,000, minimum liquidity = $250,000
- Loan amount >$1,000,000 to $1,500,000, minimum liquidity = $500,000
- Loan amount >$1,500,000, minimum liquidity = $1,000,000
- Cash, cash equivalent securities and other readily marketable securities may be used as verified liquidity (70% of value of stocks and bonds will be used)
- Personal and Business funds are acceptable
- Borrowers on transaction must amount to 100% ownership of business to use business funds
- Funds in a retirement account will not be included as verified liquidity
- Liquidity minimums are calculated after closing and do not include proceeds from cash out on
1003 Structure and Income Documentation Requirements
- If only one borrower on loan, that borrower must be self-employed
- If multiple borrowers on loan, at least one must be self-employed as their primary occupation
- Self-employed borrower to provide income figure on 1003
- Please note tax returns will NOT be required
- Borrower must have been self-employed for a minimum of two years in same business
- Borrower’s employment phone number must be verified via 411 or internet search
- Business license or CPA letter verifying borrower’s ownership of business for last two years
Non Self- Employed *Co-Borrowers*
- Income for wage earners must be verified according to Fannie Mae standards:
- Recent paystub covering a 30 day period
- Most recent two years W2’s
- Commission / Bonus / Overtime
- Written VOE required to break out past two years and YTD
- Passive income is permitted. See below.
- Rental income for investment properties will be verified through executed leases that are current
- Passive income is NOT permitted for self employed borrower (verifiable passive income is acceptable for non-self employed co-borrower). Forms of passive income include, but are not limited to:
- Social Security
- Trust income
- Interest and dividend
- Annuity payments
- Child support
4506 Forms must be signed at closing, however, audits will not be run
Topic Underwriting Specifications
- A full appraisal with an interior and exterior inspection, including interior and exterior photos is required on all loans.
- All transactions with a loan amount >$750,000 will require a desk review.
- Properties that have been listed for sale within 3 months of the application date are ineligible.
- Maximum 20% appreciation if subject property was purchased within last 6 months. Additional restrictions may apply.
Bankruptcy, Foreclosure, Short Sale or Deed-In-Lieu
- Bankruptcy, Foreclosure, Short Sale, Deed-in-lieu – not permitted
- Consumer credit counseling is treated the same as bankruptcy and is therefore not permitted Buy Down, Temporary Temporary Buy Downs are currently not permitted Credit History
- Payments: 0x30 day late housing within last 24 months, 0x30 day late revolving and installment within past 12 months
- Non traditional credit is not acceptable
- Minimum two open and active trade lines with minimum 24 month history
- Credit Review Documents Documents older than 90 days as of the closing date are unacceptable. This includes new construction.
- U.S. Citizens
- Permanent Resident Aliens
- Non-Permanent Resident Aliens *
- H-1, H-1B, H-2A, H-2B, H-3 permitted.
Eligible Funds Must be borrower’s own personal or business funds
- Cash Out transactions in TX that do not meet 50(a)(6) requirements
- Borrowers who are principal or employees of third party originators
- Property in an Estate
- Employer/Employee Sales
- Flip transactions
- Borrower affiliated with the builder, developer or property seller
Interested Party Contributions Limited to 3%
Multiple Property Ownership
- In addition to the subject property, the borrower(s) may not own more than three (3) additional financed properties.
- Properties owned which are free and clear of any financing do not count toward this limitation.
Non-Arms LengthTransactions Gift of equity, sale by owner and any other non-arms length transactions are not permitted
Non-Occupant Co- Borrowers Not allowed.
Non-Owner Occupied Property Not allowed.
Private Mortgage Insurance Not allowed.
Eligible Property Types
- 10 acre limit, no hobby farms
Qualifying Rate ARM
- The qualifying interest rate will be the greater of the:
- Note Rate
- Fully Indexed Rate
Qualifying Payment The fully amortized payment based on the qualifying rate will be used to qualify the borrower
- Total monthly housing ratio is limited to 33%
- Total monthly debt ratio is limited to 43%
Liens on the property must be seasoned for a minimum of 6 months. If the lien is a HELOC, it must be seasoned 12months with no draws taken in the previous 12 months. Properties listed within 3 months of application date are not eligible for financing.
Subordination Agreement Subordination agreement is mandatory, if applicable