BANK STATEMENT LOAN
A bank statement loan is a program that allows self-employed borrowers to use their bank statements to verify income rather than tax returns. Although the interest rate may be a little higher, there are many cases where this might be a much better option.
Typically, the underwriter will review 12 or 24 months of deposits to determine average monthly deposits over that period and divide that in half assuming overhead and business expenses. The rate for 24 months is slightly better than a 12-month review of deposits.
General Guidelines
Mortgage credit certificates are not permitted for a bank statement loan.
There can be no more than four (4) borrowers per loan.
We can do no more than ten (10) loans per borrower at any one point in time.
Borrower Eligibility
All borrowers must have a Social Security number for a bank statement loan. Documentation requirements apply to Permanent Residents and Non-Permanent Residents.
- U.S. citizens
- Permanent Residents
- A valid and current Permanent Resident card (form I-551) also known as a green card is required.
- A passport stamped processed for I-551, temporary evidence of lawful admission for permanent residence. Valid until ______, employment authorized. It must evidence the holder has been approved for, but not issued, a Permanent Resident card.
- Non-Permanent Residents
- A borrower with an expired, but otherwise acceptable Visa type, is permitted with supporting documentation. For example, supporting documentation includes, but is not limited to, any of the following:
- Form I-797 which is issued when an application or petition is approved;
- Form I-797C or I-797E which must not state that the application has been declined;
- Application for extension of current visa I-539 (or equivalent) or copy of application for green card I-485 (or equivalent) and electronic verification of receipt from the USCIS website;
- If the borrower is sponsored by the employer, the employer may verify that they are sponsoring the Visa renewal;
- In lieu of a Visa, an Unexpired Employment Authorization Document (EAD), or I-94 or I-797; and a letter from the employer or a verification of employment reflecting continuance is likely are required;
- Grant of Asylum (Asylee) is permitted with letter from U.S. Citizenship and Immigration Services indicating eligibility and completed form I-94, Arrival and Departure Record, indicating borrower has been granted asylum in the U.S.; or
- Deferred Action for Childhood Arrivals (DACA) approval.
- Not eligible for cash-out transactions.
- Max LTV of 80% on a purchase and rate & term refinance.
- A borrower with an expired, but otherwise acceptable Visa type, is permitted with supporting documentation. For example, supporting documentation includes, but is not limited to, any of the following: