Unconventional Mortgages and Loans (800) 718-8906

Unconventional Mortgages and Loans

Customer Service: (800) 718-8906

Business Purpose Loans

Business Purpose/Stated Income | Owner-Occupied

The “business purpose” loan is a primary residence stated income mortgage program. In all actuality, it is a stated income program because it doesn’t require any kind of income documentation. True No Doc mortgage program on a primary residence is considered a “business purpose” loan, as opposed to a “Consumer Purpose Mortgage” (a regular mortgage loan). It’s done this way so lenders can offer and fund cash-out refinance loans (owner-occupied) to self-employed borrowers. Corporations and LLC’s businesses OK.

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What is a Business Purpose Mortgage?

There are specific documentation guidelines for this type of program and must be followed accordingly. One of which is we require a statement from the borrower/applicant describing the intended use of funds (hand-written is best) in great detail. Funds are supposed to be used to improve, start or expand a business.

Cash Out Refinance Business Purpose Mortgages

Business Purpose Cash-Out Refinance loans are a good and effective way to effect a stated Income loan to where we don’t need to provide tax returns and everything else that goes into a full doc loan program.

Cash Out Business Purpose Mortgage Guideline Highlights

Cash-out proceeds must be wired into the borrower’s business bank account. A minimum of 51% of cash-out must be used to improve or expand the business and Borrower must submit a cash-out letter of explanation detailing the use of funds including remodel construction bid contracts, etc. Inventory purchase, The letter of explanation must also include an explanation regarding the anticipated economic gain that will result from loan proceeds.

Eligible Employment Types

Eligible Business Entities

Some of our lenders will allow for a business entity change (2 years of employment verification). For example, if a borrower changes their company from a corporation to an LLC, they’ll allow that. Even from a 1099/independent contractor business to a corporation. We know this from experience.

Income Documentation - No Doc + Reserves Not Required

Property Types and Occupancies

Non-Owner Occupied. A rental survey usually is required for investment properties

All owners/people on the title of the property must apply (be on the application). If this is for some

reason not ideal or is not conducive to the borrowers’ preference, the property owner can “quitclaim” him or herself off of title anytime between the “Application Date” and the Close of Escrow, then just go back on the title after the loan closes if you wish. This can all be done and executed at the closing table.

Business Purpose and Cash Out

Cash-out can be used for any “business purpose”; improving the economic disposition of the company. An example of this could be to improve the physical location architectural design of the business renovation. Good supporting documentation could perhaps be some architectural drawings, Mechanical/Plumbing/Structural & Electrical design plan and specifications.

Construction: Electrical – Lighting plan, power plan, panel schedules, and single line diagram, details and specifications, Title-24 compliance documents.

Plumbing – Sanitary waste and vent piping plan, domestic water, and piping plan, details, and specifications.

Architectural – Cover sheet, general information sheet, code analysis sheet/exiting diagram site plan, ADA compliance sheet, floor plans, roof plan, storefront elevation, building sections.

Complete original appraisal with interior/exterior photos of the subject property and sales comparables.

Hazard insurance coverage equal to the replacement or guaranteed replacement cost. Max deductible 1% of the face value of the dwelling coverage amount, but no more than $3000. 12 months of paid coverage required on purchase loans and 6 months for refinance loans.

Sitework: Building demolition, Concrete, etc.

Available in the Following States:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and Wisconsin.

Alternative Income Documentation

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Non-Qualified Mortgage Lending

Purchase Loans - Alt Doc

Refinance Loans - Alt Doc

Credit Score Tools

One Month Bank Statement Loan

Bank Statement Refinance Loans

3 Month Bank Statement Loans

Bank Statement Loan Niches

Alt Doc Purchase Loans

Alt Doc Refinance Loans

Non-QM Lenders Categories

Investor Loans

Jumbo Bank Statement Mortgages