The Portfolio Closed-End Second Mortgage is designed for qualified homeowners and investors who need a second mortgage but may not fit traditional full-documentation underwriting.
Alternative income documentation options include bank statements, 1099 income, P&L statements, and written verification of employment, with second mortgage amounts up to $750,000.
Alternative Income Documentation Options
Available documentation options may include:
- Alt Doc Second Mortgage – expanded income documentation for borrowers outside traditional full-doc guidelines
- 1099-Only Second Mortgage – qualify using eligible 1099 income
- Bank Statement Second Mortgage – qualify using 12 to 24 months of eligible bank statement deposits
- P&L-Only Second Mortgage – borrower-prepared or qualified third-party P&L may be accepted in place of tax returns
- WVOE Second Mortgage – written verification of employment may be used under applicable guidelines
Documentation requirements vary by borrower profile, occupancy, credit score, and loan amount.
Loan Amounts and CLTV
Program parameters include:
- Minimum second mortgage: $150,000
- Maximum second mortgage: $750,000
- Combined first and second liens up to $3,500,000
- Maximum Combined Loan-to-Value (CLTV): Up to 90%
Maximum CLTV depends on credit score, documentation type, occupancy, and loan amount.
Credit Score Requirements
Minimum credit scores generally range from 680 to 720, depending on:
- Loan amount
- CLTV
- Occupancy
- Income documentation type
- Overall credit profile
Higher leverage and larger loan amounts may require stronger credit.
Fixed-Rate Second Mortgage Terms
Available fixed-rate terms include:
- 10 years
- 15 years
- 20 years
- 30 years
This is a closed-end second mortgage, meaning the borrower receives the approved loan proceeds at closing rather than using a revolving line of credit.
Eligible Borrowers
Eligible borrowers may include:
- U.S. citizens
- Permanent resident aliens
- Certain eligible trusts
- Non-occupant co-borrowers when also obligated on the first mortgage
Additional borrower eligibility requirements may apply.
Eligible Property Types
Eligible properties may include:
- Single-family residences
- 2-unit properties
- 3-unit properties
- 4-unit properties
- Condominiums
- Planned Unit Developments (PUDs)
- Townhomes
Short-term rental properties are not eligible under this program.
Investment Property Requirements
Investment property transactions may require a minimum DSCR of 1.00.
DSCR requirements apply to applicable investor scenarios and are separate from owner-occupied qualification requirements.
Appraisal Requirements
A full appraisal is generally required when:
- The second mortgage exceeds $250,000, or
- Combined loan-to-value exceeds 80% CLTV
Additional valuation requirements may apply depending on property type and loan amount.
Prepayment Penalties
Prepayment penalties are not permitted on primary residences or second homes.
Investment property requirements may vary by state and loan structure.
Portfolio Second Mortgage Highlights
Key features include:
- Second mortgage amounts up to $750,000
- Combined liens up to $3.5 million
- CLTV up to 90%
- Bank statement qualification
- 1099-only qualification
- P&L-only qualification
- WVOE option
- Fixed-rate terms up to 30 years
- Primary residence, second home, and investment property options
States Where this Program Is Available
The Portfolio Closed-End Second Mortgage is 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.
Last Updated on 1 month ago by Broker Mortgages