Nationwide commercial mortgage banker RSA funding now offers a state income commercial financing option through its wholesale channel.
Underwriting can be pretty tough on self-employed borrowers and property investors due to their income or debt-to-income ratio issues.
Inconsistent income streams that are pretty hard to document or a broad credit portfolio can make banks wary of the risk presented by these types of borrowers.
As a result, most of them are turned down by banks and other private lenders, leaving a significant part of the borrower market underserved.
Commercial mortgage banker RSA Funding realized this issue and saw that something needs to be done to meet the needs of individuals who, despite their non-traditional qualifications, are still creditworthy.
And indeed, RSA delivered, as it just recently rolled out a new product through its wholesale channel called the stated income commercial financing option.Get today’s stated income loan interest rates!
A significant addition
Adding to its roster of loan products, RSA Funding’s stated income commercial financing option:
- Offers financing for one-to four-family non-owner occupied properties
- A loan-to-value ratio of up to 80 percent may be allowed depending on the type of property being financed
- The minimum loan amount is $100,000
- Interest rates start at 8 percent
- Loans close within two to three weeks in average
About RSA Funding
A nationwide commercial mortgage broker, RSA Funding specializes in placing commercial mortgage borrowers in loans through its wholesale lending channels. RSA Funding brokers many different loan types such as Stated Income, Multi-Family, SBA, Bridge and Bankable Loans.
Not just commercial
Stated income loans are not limited to the commercial market. Many lenders also offer stated income loans for individuals who cannot present traditional income documentations such as W2 forms or tax records. Instead, lenders simply ask the borrowers to state their income and they take their word for it.
But it’s not actually that easy. Lenders who give out stated income loans these days still require their borrowers to have good credit, lots of cash reserves, and even high down payments.
Your employment and/or investments are verified, and you need to show your bank records and statements to prove that you have money.
Because this mortgage product is usually considered risky, borrowers are usually charged with higher interest rates than conventional, conforming loans.
Most stated income loans are based on the equity position of the property. That means that the more the borrower puts down into the property, the easier it will be for him or her to get a loan approval.
Stated income loans are preferable for people who don’t want to pass on certain investment properties but had their cash already intended for some other purpose.
Some investors, who although have the reserves to purchase the property in cash, still choose to use a stated income loan because they want to keep a portion of their money for other investments.
Rules on investment mortgages
New laws established in 2014 made it hard for lenders to approve loans without determining a borrower’s ability to repay. However, most investment mortgages became exempted to the rule since they are considered business loans.
The Dodd-Frank Act of 2010 also made it illegal for lenders to offer stated income loans.
Now, almost a decade after the financial crisis of 2008, many lenders are starting to relax on their guidelines and qualifications. But can these loans be considered the new subprime?
Hardly so, as being lax in one area of qualification is also compensated with some other requirement (e.g. only stated income but a requirement of about 40 percent in down payment or more, etc.).
If you’re a self-employed individual or investor looking for investment financing, programs such as that offered by RSA is worth exploring.Click to See the Latest Mortgage Rates»