Unconventional Mortgages and Loans

Overview & Underwriting Philosophy

Summary:

Focus on income stability, employment history, credit depth, assets, and collateral.

Common-sense, manual underwriting with emphasis on Ability-to-Repay (ATR).

Loans must be ATR compliant unless business-purpose.

AUS Findings must show Refer / Approve-Ineligible, or use an Alternate Loan Review Form.

Programs & Products

Summary of available documentation types:

Full Doc (1 or 2 Years) – Standard FNMA documentation
Bank Statements – 12 or 24 months
1099 Only – 1 or 2 years with paystub
P&L Only – 12 months, CPA/CTEC/EA prepared
WVOE – FNMA 1005 + 2 months bank statements
Asset Depletion – 6 months statements
DSCR – Investment properties only

Contact a Loan Officer

Eligible Product Terms:

Fixed: 15, 30, 40-year
ARM: 5/6 SOFR, 7/6 SOFR
Interest Only options available (10-year IO)

Key Limits (matrix-driven):

Max LTV, CLTV, Loan Amounts, and Minimum FICO vary by matrix.
IO has LTV and DTI limits.

Property Eligibility

Eligible:
SFR, PUD, Townhomes, Condos
2–4 units
1 legal ADU allowed on SFR
Max 20 acres (case-by-case >20)

Ineligible:

Manufactured/mobile, co-ops, houseboats
Hobby farms, working farms, orchards
Properties in NY (not allowed)
Certain states restricted for OO / 2nd / consumer-purpose investor

Appraisal Requirements:

1 appraisal ≤ $2M
2 appraisals > $2M
C5/C6 or Q6 not allowed unless repaired

Condos:

Warrantable & Non-warrantable allowed
Condotel allowed with restrictions (full kitchen, 500+ sq ft, no hotel branding)

Transaction Types

Payoff first & seasoned seconds
HELOC: < $2,000 draws over 12 months
Up to $5,000 or 2% cash back allowed (max)

Rate/Term Refinance:

Payoff first & seasoned seconds
HELOC: < $2,000 draws over 12 months
Up to $5,000 or 2% cash back allowed (max)

DSCR Cash-Out:

Proceeds cannot be used for personal or consumer purposes.

Borrower Requirements {#borrower}

General:

Must pass fraud report / background QC
Social Security Number required (except Foreign Nationals)
Non-occupant co-borrowers allowed (family only)

Residency Types:

U.S. citizens
Permanent & Non-Permanent Residents
Foreign Nationals allowed (with restrictions)

First-Time Homebuyers / Investors Allowed:

Credit Guidelines {#credit}

Credit Report Requirements

Full tri-merge
All high-level fraud alerts must be cleared
Gap credit report required

Tradelines:

Standard tradeline minimums required
Non-traditional credit allowed case-by-case

Assets

Documentation:

1–2 months statements
Business funds allowed with CPA letter
Gift funds allowed (per matrix and occupancy)

Reserves

Based on loan amount, occupancy, and program type
Cash-out from subject transaction may satisfy reserve requirements

Income Documentation {#income}

Full Doc: 1 or 2 years
Bank Statements: 12 or 24 months
1099: 1–2 years + paystub
P&L Only: 12-month CPA-prepared
WVOE: Written VOE + 2 months statements
Asset Depletion: Eligible asset types only (brokerage, checking, savings)

General Rules:

Income must be stable with acceptable trends
DTI per program matrix
Residual Income requirements apply

DSCR (Investor Only) {#dscr}

Key DSCR Highlights:

Qualification based on rental income vs PITIA
Short-term rental income permitted if appraiser supports
DSCR < 1.0 allowed per matrix (ratio dependent)
Cash-out allowed but proceeds must be for business/investment use
First-time investors allowed with restrictions

Documentation:

1007 Rent Schedule
Lease or market rent
Operating history not required for non-experienced investors

Available in the Following States:

Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and Washington.

Alternative Income Documentation

Contact a Loan Officer