Can Someone Buy A Home With No Reportable Income (Missing 2 Years of Income Statements)
Yes, it’s possible to get a home loan without verifiable / reportable / taxable income (primary residence only); however, it requires a great credit score, a large down payment, low debt-to-income ratio, and substantial net worth / assets to support repaying the loan. No-income verification home loans (a.k.a. no document loans, bank statement loans, stated income loans) are harder to obtain than a traditional home loan with a reportable income stream. While they do not require one to provide proof of a traditional income stream through W-2s or tax returns, rather one must qualify for the loan based on assets, credit history and credit scores of 700+.
While these were common before the 2008 financial crisis, no-income verification loans (Non-QM Loans) are no longer widely available to homebuyers. These loans are risky for lenders, so they require higher mortgage rates for borrowers. Only single-family residences, condos, or multi-family homes with between one and four units are eligible for these programs. No Documentation Loans come with a few different variations, here’s a closer look at each one:
Stated Income, Verified Assets (SIVA): The lender often requires self-employed borrowers to show proof of a consistent income through bank statements. Self-employed and high-net-worth individuals are prime candidates for this type of loan.
No Income, Verified Assets (NIVA): The lender looks at the borrower’s assets with the goal being to have enough assets the lender could seize as collateral in case of default. A retiree with cash reserves and limited income is the prime candidate for this type of loan.
Stated Income, Stated Assets (SISA): The lender truly requires no documentation at all with this loan-type. Instead, the lender takes the borrower's word for how much income and assets they have. This is unavailable to owner-occupied properties, but real estate investors are the prime candidate for this type of loan.
No Income, No Assets (NINA): The lender looks at the rental income potential of the property (investors only) and if the rental property’s potential cash flow can cover the monthly payment. Real estate investors are the prime candidate for this type of loan.
Sale-Leaseback Agreements (SLA): The lender offers this as an alternative to a HELOC. The lender requires a high amount of equity built up in the home. This agreement convert all the equity into cash without needing to meet the qualifications that come with other home loans. In this scenario, one will sell their home, obtain the cash, and use that cash to purchase a lease renting the home back to the borrower. Be aware that, one would no longer be a homeowner with this option. There are very few people who are a prime candidate for this type of loan.
No Income, No Job, No Assets (NINJA): The lender relies entirely on the applicant’s reported income, job, and assets. These types of loans are no longer available post-2008.
NOTE: We have specific providers that we must call and talk with before sending in one's application. They offer "No-Income HELOC Programs" that have minimum requirements, such as: 12-24 months of PITI payments in a reserve account, high credit scores, good credit history and more. Their LTVs are up to 75% of the property's value, up to a maximum of $1,000,000.
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