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“Bank Statement Loans;” Non-Agency/QM Loans; Unseasoned Credit

“Sub-prime” or “non-agency” or “non-QM” loans are surfacing again. These are for borrowers who do not meet traditional Fannie, Freddie, FHA or JUMBO Guidelines.

Examples include people with unseasoned short-sales, bankruptcies and foreclosures, and self-employed people with insufficient income on their tax returns, but ample cash flow.

Self-employed people can use the total deposits from their last 24 months of bank statements (divided by 24) to establish income (“Bank Statement Loan”).

We have touted these loans in the past but the difference now is that the lenders are faster, and more reputable and established (some are hedge funds lending their own money). Some of the past lenders were simply incompetent and unable to perform, so we avoided these loans.

We should also note that these loans are not “low rate” options. The interest rates for these loans are one to three percent higher than Fannie/Freddie rates, but they are far lower than alternative “Hard Money” options. They are also far cheaper than Hard Money from a points and fees perspective.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646