No-income verification mortgages (also known as stated-income mortgages) allow applicants to be qualified using non-standard income documentation.

Most mortgage brokers require you to provide tax returns. No-income verification mortgages, however, consider other factors like available assets, home equity, and cash flow. If you are self-employed, or rely on seasonal income, this makes it easier for you to obtain a home loan.

What is a No Income Verification Mortgage?

Brokers don’t require applicants for no-income verification mortgages to show or document income sources. These mortgages are also known as “stated income” loans, “no-doc”, or “alt-doc”, but they all fall under the same umbrella definition. There are only a few exceptions. There are four types of no income verification mortgage loans. Each has its own requirements.

  • SISA – Said income, declared assets
  • SIVA – Said income, verified assets
  • NIVA: No income verification, verified assets
  • NINA – no income verification, no asset verification

Stated Income and Stated Assets

If you have substantial income or assets that are difficult for documentation to support, a SISA loan may be a good option. The lender will accept your income and assets when you apply for a SISA Loan. No documentation is required.

Small business owners who store all of their assets in a company account but don’t record their personal compensation with W-2 forms, pay stubs or 1099 forms can benefit from this. Bank statements from 12-24 months can be used in these cases to calculate monthly cash flow for the business.

Verified assets, state income

This loan type is best if you can’t document a large portion of your income but have verifiable assets. The lender will accept your income and verify your assets.

SIVA is an option for someone whose income comes from tips or gratuities, but who also has a personal bank account.

No Income, Verified Assets

An applicant who has verifiable assets and income that is not documented can apply for a no-income, verified assets loan. The lender verifies your assets but does not consider your income in this instance.

Retirees who draw income from retirement accounts might not have sufficient verifiable income. However, their assets can be documented and they could benefit from a NIVA loan.

No income, no assets

NINA loans have the lowest requirements. They are ideal for applicants who can’t provide documentation for income or assets. NINA lenders approve only collateral and other non income factors.

A foreign employee who has assets in a foreign banking institution may not be able provide documentation that is acceptable to U.S. lenders. A NINA loan may be an option in these cases. This will allow the borrower skip international asset transfers and document translation.

History of no-income verification mortgages

In the years before 2008’s housing market crash, no-income verification loans were very popular. They were fueled by a relaxed underwriting standard and rising real property prices, which encouraged consumers to believe that homes would keep increasing in value. No-income loans were soon relegated to the bottom of the investment and lending market.

These loans were originally intended to help people whose income was affected by seasonality, self employment, or independent contracting. They became an easy way for lenders to get unqualified borrowers through mortgage processes in the wake of the crisis.

These loan programs disappeared almost immediately after housing defaults soared and government regulation tightened. Lenders had to prove that the borrower could repay the loan. Investors didn’t want to buy mortgage-backed securities to finance loans that Fannie Mae or Freddie Mac wouldn’t endorse.

Are there any available mortgages that require no income verification or limited income verification?

These loans can still be obtained from lenders that offer portfolio lending options. They are not subject to the qualified mortgage rules of government agencies such as Fannie Mae and Freddie Mac. These products are created by no-income lenders who use private equity from investors.

These include direct lenders such as Chase Bank, Citibank, and U.S. Bank, and wholesale lenders such as Stearns and JMAC, and large financial investment companies like Charles Schwab.

These types of loans are not offered by most banks or credit unions because it is difficult to package them and sell them to secondary investors.

Few lenders will make such a large capital commitment, as they know that there is no other option than to keep these mortgages in-house. Lenders are reluctant to offer no-income mortgages due to the additional risk.

Are a No-Income Verification and Limited Verification Mortgages right for you?

If you are self-employed or have difficulty qualifying for conventional mortgage loans, no-income and limited income verification mortgages might be worth your consideration. These scenarios can make it difficult to document your income. This makes a no-verification loan perfect.

These loans should not be used to conceal insufficient income. A no-income verification mortgage should only be applied for if you are able to afford the monthly payments. These loans should not be viewed as a way to avoid the common-sense question about affordability, but rather as a way to reduce paperwork.

There are also significant disadvantages to no-verification loans. They have higher interest rates than conventional loans and place a lot of emphasis on upfront commitment.

This can often lead to minimum down payments as high as 40% to 20%. These programs also require a minimum credit score of 620 or higher.

Where can I get a no-income verification mortgage loan?

Start exploring your options for these loans by talking to a portfolio lender, or a mortgage broker who works directly with portfolio lenders.

Look into the mortgage broker options available to existing clients if you have investment or retirement accounts with a major financial institution.

Each broker sets its own criteria, based on the risk tolerance of the investor and other factors. Lenders will typically require greater credit scores, higher down payments, and lower loan-to–value ratios than comparable full-documentation loans.

The mortgage broker may request 12 months’ worth of bank statements in order to calculate your monthly cash flow. The lender might request two appraisals in order to verify the property’s value and your equity stake.

Lenders will generally seek out compensating factors to replace the information they don’t have in the form pay stubs or tax returns.