Non-QM Near-Prime Loans (2024)

No Income Verification

No income verification mortgage is a home loan that does not require income documentation unlike typical conventional loans that require pay stubs, W2’s or tax returns. This type of loan requires a larger down payment than a conventional loan because of the lack of income verification with a minimum 20% down payment and up to 70% LTV cash-out refinance depending on your credit score. A no income verification mortgage is ideal for individuals that are between jobs, if your debt-to-income is too high, individuals with plenty of assets but no verifiable income or don’t meet standard income verification for conventional loans.

Bank Statement

Bank statement program is designed for self-employed borrowers that cannot qualify using the net income on their tax returns. Eligible borrowers can be owners of a company, 1099 employees, sole proprietor or individuals that make regular deposits into their business or personal bank accounts. The program requires either 12 months or 24 months consecutive bank statements and depending on the type of business or service the program uses up to 80% of deposits to qualify for a mortgage.Minimum 10% down payment and up to 80% LTV cash-out refinance depending on your credit score.

Profit and Loss Statement

income statement covering 12 or 24 months is used to qualify for a mortgage. You must be self-employed for at least two years verified by two years of business licenses or tax preparer letter. Tax preparer letter must be provided to show the borrower’s percentage of business ownership. The borrower or tax preparer must provide a signed letter of explanation describing the nature of the business, how income is generated, and how long the business has been in existence. Profit and Loss statements must be prepared and signed by a third-party licensed or registered tax preparer. Tax preparers must be a Certified Public Account (CPA), Enrolled Agent (EA), hold a state license for tax preparation. Minimum 10% down payment and up to 80% LTV cash-out refinance depending on your credit score. IRS form 4506-C is not required for income documented with profit and loss statements.

Foreign National

Foreign national or non-permanent resident loans are designed for noncitizens to buy a second home or investment property. The loan requirements are 75% LTV purchase or 70% LTV cash-out refinance and a credit report either showing no credit or credit score is acceptable. Two months bank statements are required along with a valid passport. You must have a US bank account with payments auto drafted after closing. All funds need to be in the US dollars prior to closing. Do not transfer funds directly from foreign bank account to title company, send to US bank account first and then to title company.

1099 Income

Self-employed borrowers with 1099 earnings, such as independent contractors may submit 1 or 2 years 1099 forms to qualify for a mortgage. Borrowers must be self-employed for at least two years verified by two years of business licenses or a tax-preparer letter. Multiple 1099 forms from the same line of work may be added together, for example a borrower with earnings from Lyft and Uber will be qualified based on combined earnings. Multiple 1099 forms from different industries will be reviewed independently as separate businesses, for example a borrower with earnings from Uber and courier driver must have a two-year history in each line of work to consider earnings from both sources. No pay stubs, no W2’s and no tax returns are required. Minimum 10% down payment and up to 80% LTV cash-out refinance depending on your credit score.

One year tax return

In lieu of the standard 2-year documentation requirement for wage-earners and self-employed borrowers, the following will be accepted:

• Wage-Earners: the transcript(s) for most recent year W-2(s) and pay stub(s) covering the most recent 30-day period providing year-to-date earnings at closing
• Self-Employed Alternative Doc: the most recent year filed federal income tax returns (personal and business; extensions are not allowed) and year-to-date P&L if end of applicable tax year is > 120 days from closing

Minimum 10% down payment and up to 80% LTV cash-out refinance depending on your credit score.

Non-Warrantable condo

Condo projects which do not meet Fannie Mae and Freddie Mac guidelines are known as non-warrantable. Fannie Mae and Freddie Mac use the term non-warrantable condominium for mortgages they will not purchase in the secondary market. There are many reasons why a condominium might not be warrantable such as to many investment units, to many units 30 days delinquent on HOA dues, more than 10% of a project owned by a single entity and litigation.Minimum 20% down payment and up to 70% LTV cash-out refinance depending on your credit score.

Investment Debt-Service

Debt-Service loans allow you to qualify for a mortgage based on property rental income instead of using your personal income. These loans are for investment properties and are ideal for borrowers who are not able to verify their income. You can use a Debt-Service loan to buy or refinance an investment property and it requires enough income to cover the monthly mortgage payment.Minimum 20% down payment and up to 70% LTV cash-out refinance depending on your credit score.

Condotel

A condotel is a condo that operates like a hotel. Individuals own their unit but have the option to make income by renting their unit like a hotel. Minimum square footage of 500 square feet and unit must have a fully functioning kitchen. Housekeeping, front desk, card key access and daily rentals allowed. Property must be in a resort area or metropolitan area with a project associated with hotel brand. Minimum 25% down payment depending on your credit score.

Co-op

Co-op is a type of ownership in a corporation and you’re buying shares in the corporation that allows you to live in the residence. You lease the unit you are buying. When applying for a co-op mortgage the lease term needs to be longer than the term of your mortgage. So, if you’re applying for a 30-year mortgage your lease needs to be for at least 30 years. Instead of receiving a deed at closing you’ll receive shares in the corporation.Minimum 20% down payment and up to 70% LTV cash-out refinance depending on your credit score.

ITIN

The ITIN program is available to borrowers that file tax returns with an ITIN number. Available to UScitizen, permanent residents and non-permanent residents. The following income guidelines are allowed full documentation, 12-month bank statements or Profit & Loss statement. Minimum 20% down payment and up to 70% LTV cash-out refinance depending on your credit score. Valid government photo and ITIN card or IRS letter is required.

Asset Qualifier

The asset depletion program allows a borrower to qualify for a mortgage using assets from business bank statements (100%), personal bank statements (100%), savings account (100%), money market accounts (100%), personally held stocks (80%), bonds (80%), mutual funds (80%) and vested amount of retirement/tax deferred accounts (70%). Total useable deposits ÷ 60 to determine monthly income. Example, say you have $1,00,000.00 in a money market account. Divide $1,00,000.00 by 60 which equals $16,666.66. $16,666.66 will be used as your monthly income. No pay stubs, no W2’s and no tax returns are required. Minimum 10% down payment and up to 80% LTV cash-out refinance depending on your credit score.