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Overview

Self-employed borrower with excellent credit whose income stated on their tax return won’t qualify them for the luxury home they can afford. Qualify with 100% on Personal Account Deposits and 50% on Business Account Deposits (12 consecutive months).

Program Highlights

1) Up to $4M Loan Amount;
2) Up to 80% LTV;
3) Self-Employed and 1099 Borrowers;
4) 660 or higher Credit Score;
5) No reserves required for LTV at 75% or less;
6) No 4506T / No K1 / No P&L required;
7) No MI (Mortgage Insurance).

Why do we choose Bank Statements?

Even though most Americans can easily qualify with full documentations for a conventional house mortgage loan, many still don’t fit the Fannie and Freddie guides when it comes to the lending requirements. Luckily, Non-QM loans and bank statement income documentation are great solutions for these untraditional borrowers.

Especially, self-employed wage-earners have the luxury to write off many business expenses under the IRS Tax Code. Writing off business expenses from their gross income benefits self-employed wage-earners in paying less in income taxes.

Many self-employed people with shrewd accountants often pay no taxes due to taking advantage of the tax codes. Many have negative income. Unfortunately, a lot of write-offs mean that self-employed wage-earners have a difficult time to qualifying for a mortgage. Traditional lenders will use adjusted gross income when calculating the qualified income, which is a Good news for self-employed home buyers with non-QM loans. We have Non-QM mortgages for self-employed borrowers with no income tax returns required.

Who is this program designed for?

This program is designed for borrowers who are self-employed and would benefit from alternative loan qualification methods. Bank statements may be used as an alternative to tax returns to document a self-employed borrower’s income. Besides, personal and/or business bank statements are all allowed.

At least one of the borrowers must be self-employed for at least 2 years (25% or greater ownership) to qualify for this program. This is standard requirement to determine if the borrower is self-employed borrower. Sometimes, the borrower may own ownership of a business, however, we only count as self- employed borrowers when it’s more than 25%. In agency loans, we always refer to K-1 or Schedule G; while for Non-QM loans, we always need a CPA letter to verify the actual ownership.

Usually, the lender would calculate the qualifying income by taking the average value of bank statement deposits in 12 or 24 months, then multiple a standard expense factor. That should be the borrower’s qualified income for this program.

As for the expense factor, many Non-QM investors may have a standard ratio like 50%. We have this requirement as well. However, if your CPA can provide a letter with appropriate reasons, we may take considerations for a flexible expense factor. Don’t exceed the minimum limits~

If you have any needs, contact us first, we can offer a free pre-analysis income calculation. That should be much useful for all of you especially the Mortgage Loan Officers, to service your clients better.