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This “business purpose” loan is a primary residence stated income mortgage program. It is a type of “stated income loan program” Stated Income/Stated Assets simply because it does not require any kind of financial documentation including employment documentation and several ways to circumvent the typical methods.
What makes this business purpose loan program special? Typically, a business purpose mortgage loan is on a non-owner-occupied. described in this case, it is on a primary residence. Must show legit business, business bank account, and business expansion intentions to which you will utilize partial capital obtained via our business loan cash out refinance.
Business Purpose Loan and a No Doc loan program, this difference being verification of employment. However, not anywhere close to a traditional verification of employment (VOE). Verification of Employment on this loan is more like a piece of paper for the file. Never audited simply because the nature of the program doesn’t require employment, income, or assets.
Application income and liquid asset sections are left blank. It could not be easier or more appropriate for a qualified borrower. Primary residence business purpose loans are typically equity position and credit profile-based mortgage programs on a primary residence is considered a “business purpose” loan, as opposed to a “Consumer Purpose Mortgage” (a regular mortgage loan).
Business Purpose Cash-Out Refinance loans are a good and effective way to affect a stated Income loan to where we do not need to provide tax returns and everything else that goes into a full doc loan program.
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, inventory purchase, The letter of explanation must also include an explanation regarding the anticipated economic gain that will result from loan proceeds.
Almost all Non-QM lenders offer investment property Business Purpose loans for investment, non-owner-occupied properties. A popular one is the Debt Service Coverage Ratio Mortgages (DSCR) programs and only allowed on an non-owner-occupied investment property.
A business purpose mortgage loan, when done on a primary residence is a niche loan program and an opportunity for a business professional to access the equity in their primary home as a business purpose cash out refinance for the purpose of business expansion to grow your business in any way you choose; as you see fit.
After your loan closes and the uncontrolled funds are wired to your Business Bank Account.
From there the capital is yours to do whatever you want with no restrictions, conditions, requirements, etc. You’ve accomplished this without providing any financial information and without producing any supporting documentation.
Such as the traditional requirements of business and personal tax returns, P&L, W2s, pay check stubs, award letters, distribution agreements, annuity statements, bank statements, pension distribution statements, K1 forms, 1065 forms, rental agreements, alimony award letters, etc.,..
Select 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 will allow that. Even from a 1099/independent contractor business to a corporation. We know this from experience.
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