Stated Income Loans – Stated Income Lenders
Do stated income loans exist in 2023?
Stated income loans exist today but they are different now than what they used to be prior to the housing bubble. We will take you through your stated income loan options, what you need to qualify, and where you can find a stated income loan from one of our stated income lenders.
What Stated Income Programs Are Available Now?
In 2023, self employed and W2 wage earners are able to get stated income loans with a larger down payment and at least average credit. This program will not look closely at your job and will not use any income documentation as a basis to approve your loan.
There is also another program that requires applicants to use their bank statements as proof of income instead of supplying tax returns. This type of mortgage is called a bank statement loan or alternative documentation loan.
Self employed individuals have a problem in that they take all of the legal tax deductions, but then when it comes to applying for a mortgage they are showing a much lower net income. The net income after expenses is what makes it very difficult to qualify for a conventional mortgage.
The basic elements of today’s stated income loan program is for the stated income lender to see a larger down payment or a steady flow of money coming into your bank accounts. They will typically use the last 12-24 months bank statements to get an average monthly flow. A percentage of the average deposits are used and will be considered to be “income”.
It is best to speak with one of our stated income lenders to get the specifics on the program and guidelines in your state and what can be done for you. We are helping people to get these loans every day. Click for a free consultation with a stated income lender.
Read our article about bank statement loans. They are today’s better alternative if you are self employed.
Stated Income Loan Benefits
- Helps individuals who cannot fully document their income to qualify
- Does not require you to provide your tax returns
- Low down payment options available
- Stated income mortgage rates only slightly higher than conventional rates
- You can refinance in the future when your income documentation status changes
Stated Income Loan Requirements
The stated income loan requirements will change as the lending environment and availability to fund the loans change. This is much different than conventional and government loans which remain stable and unchanged for many years.
These are the stated income loan requirements that exist today for those who wish to apply and qualify without fully documenting their income.
- There will be a minimum of a 10-20% down payment needed for a purchase.
- Refinances will allow up to 80% loan to value and possibly less for a cash out refinance.
- You may be asked to provide bank statements showing the funds needed to close (down payment, closing costs, and reserves).
- You will need credit scores over 600 today.
- Stated income credit score requirements vary by lender but the higher your credit score, the lower the down payment requirement will be from our stated income lenders.
- If you have a foreclosure or bankruptcy, then certain lenders may require a higher down payment
- No recent late mortgage payments on an existing or recently closed mortgage.
*These requirements are subject to change.
States Income Loan Property Requirements
Lenders who offer stated income loans are able to help finance the following property types:
- Single family
- 3 Unit
- 4 Unit
The property that you purchase or refinance can be either a primary residence, second home or an investment property. The down payment may vary based upon the number of units and also whether you plan to occupy the home as your primary residence.
Pros and Cons of Stated Income Loans
- Stated income loans allow borrowers to qualify when conventional loans will not work
- No need to provide tax returns for qualification purposes
- Rates are still competitive for loans with reduced documentation
- Stated income lenders may require as little as 10% down.
- You may still need to provide bank statements
- None of the government programs such as FHA apply. There is no such thing as a stated income FHA loan.
- The rates can be higher especially with lower credit scores
- Most traditional lenders and banks do not offer the program.
If you cannot fully document your income then this is the loan program that you likely need. You can always refinance in the future without a prepayment penalty.
**See our stated income loan frequently asked question section below
Stated Income Jumbo Loans
If you are looking for a jumbo stated income loan, then we can help you. Depending upon your credit, our jumbo stated income lenders determine what your minimum down payment will be. Jumbo stated income loans start can go up into the millions depending upon the stated income lender.
The down payment for the jumbo stated income loan will likely be higher. This is due to the added risk on the lender’s part when providing financing without asking for proof of income.
Stated Income Loans for 1099 Contractors
If you are a 1099 contractor and cannot qualify for a mortgage using your tax returns, then a stated income loan may work for you. The lender will use income that makes sense for your occupation without having to document that income. You can expect the down payment requirements to be a bit higher.
This program is going to also help people who were W2 wage earners and recently transitioned to a 1099 income based job less than two years ago. Without 2 years as a 1099 contractor, you cannot qualify for the traditional mortgage programs such as conventional or FHA. This makes a stated income loan a great option for now.
Stated Income Loans for Investment Properties
You may also be able to find Stated Income Loans for Investment Properties. For an investment property, this can be done with 20% down depending upon the property type and loan amount. You can also expect the interest rate to be higher when you are looking for a stated income loan for an investment property.
In these instances, the lenders will look at the cash flow or anticipated income of the building or property when determining whether to proceed with a loan approval. There is no job needed for a stated income loan on an investment property.
Individuals who have experience in owning investment properties may be offered better terms. This means a lower down payment and potentially a slightly lower interest rate.
Do you need a special mortgage for an investment property? We can help!
Stated Income Loan Rates
The interest rates for stated income loans are going to be a few percentage points higher than a conventional loan. For example, if conventional rates are at 6%, then your stated income rate may be 8% or more.
The rate you are offered is going to be directly tied to the following factors:
- Type of property
- Whether you plan to occupy the property as your primary residence, second home, or investment.
- Your credit score
- Your down payment
These factors play a role when establishing interest rates for all types of mortgages and not just stated income loans. The only way to truly know what your rate can be is to get a quote. Complete this short form for a free rate quote without pulling your credit.
Stated Income Loan FAQ
What is a stated income loan?
A stated income loan is a mortgage where borrowers provide reduced documentation and qualify by using bank deposits as proof of income. Today, the program is available for those who are self employed, who are paid with W2 income, or even with no job.
Are stated income loans still available?
Stated income loans are still available but not in the same format as they were before the housing bubble. Borrowers do not have to document any income at all but will need to have at least average credit scores and a solid down payment.
Can I get a stated income cash-out refinance loan?
Stated income cash-out refinance loans are available if you qualify. The basic requirements for a stated income cash out refinance are the same as the non-cash out version. Each lender may have a cap on the total loan to value ratio. We can help you to find the right lender for you.
Who Are Stated Income Loans For?
Stated income loans are for anyone who is having difficulty qualifying for a conventional or FHA loan using their income documentation.
Can you get a mortgage without tax returns?
A stated income loan does not require you to qualify using your tax returns for qualification purposes but they may ask you to supply them anyway. See our article on mortgages without tax returns.
Can I get a stated income loan if I receive a 1099?
1099 income earners can qualify for a stated income loan if they have their last two years 1099 to provide to the stated income lender. They also will likely have to provide copies of bank statements showing steady deposits for the lowest possible down payment.
How Much Would I Have to Put Down for a Stated Income Loan?
The down payment requirement may vary for each stated income lender but you can expect to find a down payment requirement of anywhere from 10%-25%.
Is the stated income interest rate the same or higher than a conventional loan?
Stated income mortgage rates are typically higher since the lender is taking on increased risk. However, they are not too much higher and in general are typically reasonable. The rates are much better than what you will find with hard money loans.
Do I need to be self employed for a stated income loan?
You do not have to be self employed for a stated income loan. However, if you are and can provide bank statements, then your down payment may be lower.
Can I get a gift of equity for a stated income loan?
Yes, gift funds are available for these loan programs. The stated income lender may allow you to use a gift of equity for the entire down payment amount.
Are the closing costs higher for a stated income mortgage?
The closing costs may be higher with a stated income loan if the compensation is “borrower paid”. You can expect to pay 2-3 points for a stated income loan. The rest of the closing costs will be similar to a conventional loan.
Is it hard to find stated income lenders?
Stated income lenders are not your local bank. So from that perspective it is not that easy. You also are not going to find these programs by going to a place like LendingTree. We have been connected to the lenders who offer these programs for 15 years. You came to the right place. Just let us help you.
What states are stated income loans available in?
Stated income loans are available in all 50 states. We are connected with multiple lenders who can help in the state where you live. If you complete our contact form, we will analyze your situation and will determine which of those lenders would be the best fit for you.
Are Stated income loans available for investors?
Yes but the requirements are much different and there may be a prepayment penalty.
Can you buy land with a stated income loan?
We are not available of any stated income lot loans. Keep checking back with us as lender guidelines often change.
Are stated income home equity loans available?
Stated income home equity loans for the most part do not exist. Your best bet is to get a cash out refinance which essentially gets the job done. It is not a line of credit and you would pull out the entire amount at once.
Where can I apply or a stated income loan online?
We do not recommend that you apply online without discussing your options first with a stated income lender. Just complete our contact form here. It is not an application but just an initial gathering of basic information to determine which stated income lender is best for you. Then, you will have a discussion with the lender and determine whether you would like to move forward with your loan.
Are Stated Income Loans Illegal?
Stated income loans are not illegal and they are available through Non QM lenders who create the guidelines and keep the loans in their portfolio after closing.
What Others Are Saying About Stated Income Loans
Refiguide.org – “2023 is a great year for no income verification loans“. They also said “stated income loans are making a come back and there are more programs today for borrowers than in prior years.”
My Mortgage Insider – “stated income loans are great for borrowers who have stacks of tax returns.“
Eric Jeanette – “stated income loans are a great way to overcome income documentation challenges to purchase or refinance a home.”
The Mortgage Reports – says in summary that there are millions of self employed borrowers out there and this is a good time for them to qualify for a mortgage.
Picking the right lender – This article looks at the several different types of lenders and their risks vs benefits.
Mortgage Options for Self Employed Buyers – See what loan programs are available if you are self employed.
Questions to Ask your Mortgage Lender – Find out what you should be prepared to ask a lender when you are reviewing your mortgage options.
Jumbo Stated Income Loans – See what the largest loan amount is for you when applying for a stated income loan.
Non QM Loans – Which lenders offer Non QM loans and what are they?
We are able to help you to find a stated income loan with the best stated income lenders in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.
The History of Stated Income Loans
Qualifying for a Stated Income Loan Before The Housing Bubble
In exchange for the additional risk referenced above, stated income lenders will typically have higher interest rates for these loans. There are just a few stated income lenders who can help in all 50 states. In fact, California has big problems right now because there are many self employed borrowers there, and only a handful of mortgage lenders who are into the stated income lending business.
Stated Income Loan Requirements before the Housing Bubble
Most stated income lenders required a minimum of 20% down or equity in the property plus a credit score greater than 640. Some stated income mortgage lenders may have accepted a lower down payment, and lower credit score requirements. Stated income lenders in California may require a larger down payment and the rates will most likely be a bit higher.
Most stated income lenders require a minimum of 40-50% down or equity in the property plus a credit score greater than 700. Some stated income mortgage lenders in New Jersey, Connecticut and Pennsylvania only require 30% down and there are no minimum credit score requirements. Stated income lenders in California may require a larger down payment and the rates will most likely be a bit higher.
Many people feel they need a no doc loan or a stated income loan but that may not necessarily be true. You should understand your mortgage loan options before doing anything. Then speak with a loan officer to get a free stated income rate quote based upon your particular scenario.
Other Helpful References
The Pros and Cons of Stated Income Loans – Mortgage 101
Stated Income Construction Loans – Construction Loan Center
The Mortgage Professor – Scapegoating Stated Income Loans – Washington Post
Stated Income Ruling Regarding Bankruptcies – Bankrate