Stated income business loans are emerging as one of the most attractive options for investors in single family home sector.
The mortgage and loan market has changed dramatically over the last decade. In many ways it is even more efficient for real estate investors than it has ever been. The extent to which investors are able to enjoy this often comes down to their awareness of the various loan programs that are available to them. One of the most versatile and powerful options today, especially for newer and returning investors, and those with small portfolios of rental properties is the stated income business loan. How does it work? What are the benefits?
Stated Income Business Loans
A huge portion of the capital out there today has been channeled through commercial lenders, and has been directed for business purpose loans. That is in contrast to all of the money which was being plowed into residential consumer loans back in the early 2000s. It can still be hard for regular home buyers to get funded. Yet, it may be easier than ever for investors to use this capital to acquire, renovate, and optimize portfolios of single family rental homes. This is especially true with the return of stated income loans. They don’t require W2s or tax returns, and credit requirements have been dropping. Once the word gets out, and this capital is put into play by investors, the ensuing velocity in the market could prove to enhance portfolio value even further.
Why Lenders are making Stated Income Loans
Until recently stated loans were almost non-existent again. New regulations demanded that consumers be underwritten even more stringently than ever when it comes to residential lending for owner occupants. Unfortunately, this cut off important liquidity to the very investors who are critical for fueling the market and economy. These are the self-employed, business owners, and full-time investors. All of whom face a lot of struggle in verifying income, or do not want to go through all of the paperwork hassles, and stripping of their financial privacy. Now lenders have realized that these prime borrowers are not only great to invest in, but offer less regulatory risk and liability than regular home buyers. The income their properties produce, and collateral they provide is enough. So, access to these loans is expanding, along with higher LTVs, and expanded credit approvals.
The Benefits for Investor-Borrowers
Stated income business loans pack a lot of perks for borrowers too, including:
- Streamlined loan applications
- Faster loan processing times
- More privacy
- Less liability
- Access to more capital
- Unlimited loans and dollar amounts
- These loans can be ideal for getting started, getting back into the game, or expanding and optimizing existing portfolios.
- Stated Income Loan Features,
- Loan options may include:
- $100k to $2M loan amounts
- No prepayment penalties
- Rate and term or cash out refinances
- New purchases
- Recourse or non-recourse loans
- Up to 80% LTV
Credit scores from the low 600s
Don’t let more opportunities slip by until you’ve checked out what a stated income loan can do for you…