Could bank statements be a mix of both – personal and business?
For assets to close, yes. If Business assets are to be used, the business’s Accountant/CPA/Tax Preparer must verify that business will not be adversely impacted by Borrower withdrawals.
Do you allow credit rescoring mid-process or does the score have to be updated prior to application?
This is allowed on a case-by-case basis. If tradelines are being paid off or paid down to improve FICO scores, must provide proof of payment and source of funds used.
Do you need to be licensed in the state if you are doing an investment property?
If the loan program is for Lite Doc investment, yes. If the loan program is DSCR, it will depend on the state in which the property is located.
Are gift funds allowed? If so, can it be 100% of down payment?
Yes, 100% gift funds are allowed for down payments and closing costs. You can also accept a gift of equity from your relative in the purchase.
Does the P&L need to be audited, since it is to be signed by CPA instead?
The accountant does not need to make a representation that the P&L is audited.
Do you need to source large deposits on those bank statements?
We allow up to 10k of unsourced deposits over a one-month period combined.
How many months reserves are needed? For subject properties only or all properties?
It depends on the loan program. For Owner-Occupied Lite Doc and Bank Statement programs, see below: LTV Min. Reserve Requirement Less than or equal to 65% LTV 0 months PITI(A) Greater Than 65% LTV 3 months PITI(A) Borrowers who own other financed properties are required to evidence an additional 1 month of PITIA reserves for […]
Are there FTHB restrictions associated with the Lite Doc program?
The only restriction is that First Time Homebuyers require a Minimum 660 FICO. You can be a FTHB and purchase an investment property and use the rental income to qualify unlike Fannie Mae and Freddie Mac – and we also accept gifts towards down payment and closing costs.
Are there any minimum number of tradelines?
We require at least 3 tradelines reported for a minimum 12-month period. Borrower may use alternative tradelines to meet the minimum requirements.
Do you apply an expense factor to the P&L, or are you taking the net income?
We do not apply an expense factor of the P&L, we qualify using the net income. But, if the client owns less than 100% of the business we will use the percentage of ownership by the net income.