Stated Income Construction Mortgage Loans

Stated Income Construction Loans

Stated income mortgage loans are available for construction just as they for purchase money and/or refinancing.

Depending on the program used they typically require the borrower to prove the availability of cash reserves but not income. The only documentation requirement for the stated income is normally a letter from the borrower's CPA or Tax Preparer, simply stating the fact that he/she is self employed without any reference to income for the self employed and a letter from the employer stating that he/she is employed for the employee.

The cash reserve requirement for stated income construction loans varies depending on the loan program and it can be anywhere from 2 to six months equivalent of the PITI payments.

The cash reserve must be in an account that shows the same balance for around three months.

A stated income construction loans is not a license to lie about income but rather a convenience offered to those who have too many deductions and or very complex tax returns or who do have income that is subject to a lot of deductions. Underwriters will use common sense to determine if the stated income is a realistic one.

We also offer what's known as a No Income Qualifier. This program also requires cash reserves but it is meant for those who have independent means of income as well as a job. In this case the the actual source of income (job) is put in the application but the income field is left blank.

We do offer a number of construction loan programs that can use this type of underwriting criteria.

The cash reserve requirement will depend largely on an individual borrower's circumstances as well as the project's details. Investors have differing requirements as related to a construction loan's LTV and LTC.