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Alternative & Specialty Loans

When Traditional Mortgage Guidelines Don't Fit Your Situation

Not every borrower, property, or financial situation fits neatly into conventional mortgage guidelines.

Alternative and specialty loan programs may provide financing solutions for borrowers with nontraditional income, complex finances, unique properties, recent credit events, or other circumstances that require a different approach to qualification.

More Ways to Qualify

Depending on the program, financing may be available using alternative methods of documenting income or financial strength, including:

Bank statements
1099 income
Profit & loss statements
Asset depletion or asset-based qualification
Alternative income documentation
Non-QM qualification methods

These programs can be especially useful for self-employed borrowers, business owners, investors, retirees, and borrowers whose tax returns don't necessarily reflect their overall financial strength.

Specialty Financing for Unique Situations

Other programs may be available for circumstances such as:

Foreign nationals
ITIN borrowers
Interest-only financing
Recent credit events
Complex income
High-net-worth borrowers
Jumbo Non-QM financing
Non-warrantable condominiums
Condotels
Unique properties

Alternative doesn't mean easier—it means different. Each program has its own credit, income, asset, property, down-payment or equity, and underwriting requirements.

Bank Statement Loans

An Alternative for Self-Employed Borrowers

For many self-employed borrowers and business owners, traditional tax returns may not show the full picture of their available income.

A bank statement loan may allow qualifying income to be evaluated using eligible deposits shown on personal or business bank statements rather than relying primarily on traditional tax-return income calculations.

Who May Benefit?

Bank statement financing may be worth exploring for:

Business owners
Self-employed professionals
Independent contractors
Entrepreneurs
Borrowers with significant legitimate business deductions
Borrowers with consistent cash flow that may not be fully reflected by taxable income

How Income May Be Evaluated

Depending on the program, the lender may review a specified period of eligible personal or business bank statements and analyze qualifying deposits.

For business bank statements, an allowable expense factor or other program-specific calculation may be applied when determining qualifying income.

It's Still a Full Mortgage Qualification

Bank statement loans aren't “no-documentation” loans. The lender may still evaluate:

Credit history
Assets and reserves
Down payment or equity
Property eligibility
Occupancy
Bank-statement history
Source and consistency of deposits
Other program requirements

The difference is primarily how qualifying income may be documented and calculated.

1099 & Profit-and-Loss Loans

More Options for Nontraditional Income

Some self-employed borrowers and independent contractors may be able to qualify using alternative documentation instead of traditional W-2 income and tax-return calculations.

1099 Loans
For eligible borrowers who receive income reported on Form 1099, certain programs may allow qualifying income to be calculated using eligible 1099 earnings, subject to the lender's documentation and expense requirements.

Profit & Loss Loans
Some programs may allow eligible self-employed borrowers to qualify using a Profit & Loss statement prepared for their business, along with any additional documentation required by the lender.

Who May Benefit?

These programs may be worth exploring for:

Independent contractors
Commission-based professionals
Consultants
Freelancers
Sole proprietors
Small-business owners
Other eligible self-employed borrowers

Choosing the Right Documentation Method

A bank statement loan isn't always the best solution for every self-employed borrower. Depending on how you earn and document your income, a 1099, Profit & Loss, bank statement, or another alternative-documentation program may provide a better fit.

We'll compare the available qualification methods rather than assuming one program works for every self-employed borrower.

Asset Depletion & Asset-Based Qualification

Using Your Assets to Help Qualify

Some borrowers have substantial savings and investments but don't receive enough traditional employment income to qualify easily under conventional guidelines.

Certain alternative loan programs may allow eligible assets to be considered when determining qualifying income or the borrower's ability to repay.

Who May Benefit?

Asset-based qualification may be worth exploring for:

Retirees
High-net-worth borrowers
Borrowers living primarily from investments
Business owners with substantial liquid assets
Borrowers with significant savings but limited traditional income
Borrowers whose financial strength isn't fully reflected by tax-return income

How Asset Depletion May Work

Depending on the program, eligible assets may be calculated over a specified period to establish an amount that can be considered as qualifying income.

Assets that may be considered can vary by program and may include certain:

Checking and savings accounts
Investment accounts
Stocks and bonds
Retirement accounts
Other eligible liquid or financial assets

Not All Assets Are Treated the Same

The lender will determine which assets are eligible, what percentage of those assets may be used, and what documentation is required. Age, accessibility of funds, existing obligations, reserves, and other factors may affect the calculation.

For borrowers with significant assets, it's worth looking beyond traditional income qualification to see what other options may be available.

Recent Credit Events & Other Specialty Situations

A Past Credit Problem Doesn't Always Mean You Have to Stop Moving Forward

Traditional mortgage programs can require waiting periods after certain major credit events. Some alternative and Non-QM programs may offer additional options depending on how much time has passed and the borrower's overall financial profile.

Situations may include:

Bankruptcy
Foreclosure
Short sale
Deed-in-lieu of foreclosure
Significant prior credit issues
Recent late mortgage payments
Other circumstances that may not meet traditional agency guidelines

The Entire Financial Picture Matters

Depending on the program, the lender may consider factors such as:

Time since the credit event
Current credit profile
Re-established credit history
Down payment or available equity
Income and employment
Assets and reserves
Property type and occupancy
Circumstances surrounding the previous credit event

Other Specialty Financing Situations

Alternative financing may also be available for borrowers or properties involving:

Foreign national borrowers
ITIN borrowers
Complex or multiple income sources
High-net-worth borrowers
Interest-only financing
Jumbo Non-QM loans
Non-warrantable condominiums
Condotels
Unique or difficult-to-finance properties

Don't Assume You Don't Qualify

If you've been told that your income, credit history, or property doesn't fit a traditional mortgage program, that doesn't necessarily mean there are no financing options.

We'll look at the complete situation and determine whether an alternative or specialty loan program may provide another path forward.

Not Every Borrower Fits in the Same Box

If traditional mortgage guidelines don't fit your income, credit profile, assets, property, or financial situation, there may be another way to structure the financing.

We'll look at the complete financial picture and compare the programs that may be available rather than trying to force your situation into a loan that doesn't fit.

Let's Explore Your Options

Whether you're self-employed, retired, an investor, have substantial assets, experienced a recent credit event, or are financing a unique property, let's determine which options may make sense for you.

REQUEST A SPECIALTY LOAN REVIEW

CONTACT GIDGET

Alternative, Non-QM, and specialty mortgage programs vary by lender and may have different credit, income, asset, down payment, equity, reserve, occupancy, and property requirements. Loan programs, rates, terms, and availability are subject to change. All loans are subject to credit approval, underwriting guidelines, property eligibility, and applicable program requirements.

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