NIV investment property loans return to the market
Remember a decade ago when you could get a mortgage if you were breathing and able to sign loan docs?One of these mortgage types was the stated income loan. You told the lender your occupation and “stated” your income. The stated income on the application was never verified.
It wasn’t long before underwriters began checking to see if the stated income made sense for the occupation listed. Can a cabbie believably make $11,000 per month? There’s just not that much time for one person to drive.
Out of the desire to eliminate this ‘confusion’ and possible fraud came the No Income Verification mortgage or NIV investment property loans. The NIV loan required no income to be placed on the application – it wasn’t allowed.
Today, this Non-prime NIV loan has returned for investors to take advantage of market opportunities. This business purpose loan has the following attributes:
- No Income Stated or Verified
- Non-Owner Occupied and Investment Purposes Only
- No DSCR Required on Residential Properties 1-4 units
- No Minimum Tradeline Requirement
- 30 year Amortization. 3/5/7 year Fixed Available
- FICOs Down to 500 Available for Business Purpose Loans
- Hard Money Available for all FICO Scores
- Residential Property Types; Condos OK
- Commercial Property Types: Programs for 5+ Units Multifamily, Mixed-Use, Office, and Retail. Must show pride of ownership.
- Interest Only Available
- No Impounds / Escrows Available
- Gift Funds and Non-Seasoned Assets Available
No Income Stated or Verified
If you have been aggressive with deductions on your tax return but have adequate cash flow, this loan may be for you.
Non-Owner Occupied and Investment Purposes Only
Don’t think about this loan for your personal residence. It’s not available. This is only for Non Owner Occupied properties for investment purposes. You will be required to sign a statement which says you live in another property that you own. In addition, your documentation such as your driver’s license must match your residence address.
Property types include multi-family, mixed use, office buildings, retail, light industrial, warehouses and if for business use as described above, condos and single family homes.
30 year Amortization with 3/5/7 year Fixed Available
Lenders understand the risk of subprime (or nonprime) borrowers and attempt to price the risk accordingly. Large down payments mitigate the risk of default/foreclosure.
3, 5 and 7 year interim fixed variable rate 30 year fully amortized product loans are available. Interest only schedules are available for the term of the fixed period.
As you might imagine, these programs offer mortgage rates that are higher than loans originated and sold to Fannie Mae and Freddie Mac or insured by the FHA. And to further mitigate risk, the lenders require higher down payments (or lower loan-to-value ratios) than the agencies or FHA.
FICOs Down to 500 Available for Business Purpose Loans
Just as with agency products, you will pay a higher cost for a lower credit score. Risk based pricing is in effect. Loans are available for those who have low credit scores.
Residential Property Types
This program is available for all residential property types including detached single family homes, attached townhouses, condos, and 2 – 4 unit residential dwellings such as duplexes or small apartment buildings.
There are LTV restrictions depending on whether your property is located in a major metropolitan area.
Commercial Property Types
These property types include 5+ Units Multifamily, Mixed Use, Office & Retail and be located in a major metropolitan area. Light industrial and warehouses will be considered on a case by case basis.
Rent rolls and copies of leases will be required.
Source of Funds | Gift Funds and Non-Seasoned Assets Available
This is an interesting twist providing you, the borrower with some flexibility. This may be important if you are utilizing an entity such as an LLC or Family Trust to purchase your new investment.
In the past, these loans were often called subprime loans or the alternative “non-prime” for those of you desiring a more PC effect.
If you don’t meet the requirements of traditional bank lending, then you must consider NIV investment property loans. Call today to see how this product can help you secure your investment opportunity.