Closed-End Bank Statement Second Mortgage
This program is a closed-end, fixed-rate second mortgage option designed for self-employed individuals and real estate investors, who may not have traditional income documentation. The lender facilitates financing by relying on bank statement documentation, offering a flexible, non-QM (non-Qualified Mortgage) solution.
Key Features and Terms:
Loan Amounts and Limits
Borrowers may qualify for loans up to $3 million, with cash-out options of up to $1 million available.
Credit Requirements
A minimum FICO score of 640 is required for eligibility.
- Debt Service Coverage Ratio (DSCR)
The program accepts a low DSCR threshold of 0.75, accommodating a variety of income scenarios.
- Repayment Structure
Multiple options are available, including:- Fixed-rate mortgages
- Adjustable-rate mortgages (ARM)
- Interest-only ARM variants
- LTV and Reserve Requirements
The maximum Loan-to-Value (LTV) is 85%, providing substantial leverage for qualified borrowers.
- Eligible Property Types
This program supports a broad spectrum of properties, such as:- Single-family residences (attached or detached)
- Planned Unit Developments (PUDs)
- Low- and high-rise condominiums
- Site condominiums
- Townhouses
- 2–4 unit properties
- Modular homes
- Eligible Borrowers
Ideal for first-time investors and those seeking cash-out financing of up to $750,000. This option does not require verification of residual income. - Documentation Alternatives
Qualification is based on alternative documentation, including:- 12 or 24 months of bank statements
- 1099 income documentation
- P&L statements (“Profit & Loss Only”)
- No Ratio and Business Purpose loan programs
Traditional wage earner documentation is also accepted when available.
- Borrower Tools and Calculators
Borrowers have access to a suite of planning tools, including calculators for:- Debt Service Coverage Ratio (DSCR)
- Bank Statement income calculation
- P&L and 1099 projections
- Self-employed income estimation
- Asset depletion scenarios
Available in the Following States:
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington.