Stated Income Mortgages, Lenders, and Interest Rates

Defy Mortgage
Feb 13, 2024 • 30 min read
Stated income mortgages don't need as much income documentation

Your Comprehensive Guide to Stated Income Mortgages


Whether you’re a first-time or experienced homebuyer, navigating mortgage options can be overwhelming, especially for those with unique income streams or circumstances. This can make the path to homeownership much more challenging, but it doesn’t need to be that way.  


Over the years, the mortgage industry has evolved, creating more loan opportunities aside from stated income mortgages for borrowers of all types, including independent contractors and the self-employed. Today, various ways to qualify for a loan exist that don't require traditional income documentation.


In this article, we will explore the ins and outs of stated income mortgages, including what they are, if they still exist, their history, the drawbacks associated with this type of loan, evolved alternatives that don’t require traditional income docs, non-QM loans and more. 


(Please note that we do not offer stated income mortgages at Defy Mortgage. More on the loan options we offer that don’t require traditional income documentation below.)


What is a Stated Income Mortgage? 


A stated income mortgage, also known as a stated income loan, originally was a type of mortgage where the borrower’s income isn’t verified using any traditional income verification methods such as pay stubs, W2s, or tax returns. Instead, all the borrower had to do was simply "state" their income on the loan application without having to provide much documentation to back up their claim. Stated income mortgages were initially designed for self-employed individuals or those with non-traditional sources of income who may not have the standard documentation required for a traditional mortgage. 


While these stated income mortgages gave borrowers with non-traditional income sources an alternative path to homeownership, they presented higher risks for lenders. To compensate for this potential risk, some lenders set higher interest rates, fees, and down payment requirements for stated income loans in comparison to a traditional mortgage. 


Stated income mortgages were popular in the early-2000s, but have since become more rare due to stricter lending regulations that were put in place after the 2008 financial crisis. Since American households lost an estimated $16 trillion in net worth between late 2007 and early 2009 due to the crisis, US Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to prevent a repeat of this event. 


Stated income loans still exist today through lenders who offer them, but they are significantly different than how they were. Now, applicants can no longer state their income on an application without providing some form of proof. Borrowers who do obtain stated income mortgages from lenders who offer them are now required to have higher credit scores and larger down payments to mitigate the risk that’s posed to the lenders providing the loan. 


In addition to more stringent credit score and down payment requirements, lenders who offer these loans will sometimes verify other aspects of the borrower’s financial profile, including employment history and assets. 


With that being said, borrowers who are considering a stated income mortgage should carefully assess their ability to repay the loan based on their actual financial circumstances, the potential drawbacks and highly consider exploring other loan options that don’t require traditional income verification available to them, such as bank statement loans, profit & loss statements and more non-QM loans before making a decision.


The History of Stated Income Mortgages


The history of stated income mortgages traces back to the mid-2000s when these loans gained popularity in the US during the housing market boom. As the housing market took off, lenders became more lenient in their underwriting standards, contributing to a surge in demand for stated income mortgages. However, this lax approach led to concerns about irresponsible lending practices and the potential for borrowers to overstate their income. 


The housing bubble eventually burst in 2007, triggering a financial crisis, and stated income loans gained notoriety for their role in the subprime mortgage collapse. In the aftermath of the crisis, regulatory scrutiny increased, which led to changes in lending practices. Many lenders scaled back on their stated income mortgage offerings or eliminated them completely. The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, further tightened lending regulations, emphasizing the importance of verifying a borrower's ability to repay a loan.


Stated income mortgages contributed to the 2008 financial crisis


Today, stated income mortgages are still available, but with more cautious lending practices. Select lenders who do offer them enforce stricter eligibility criteria, higher interest rates, and lower loan-to-value ratios to mitigate risks associated with alternative income documentation. 


Keep in mind that some lenders may currently refer to loans that don’t require traditional income documentation as the following:

  • No W2 loans
  • No tax return mortgages
  • Loans that don’t require tax returns 
  • Loans for self-employed borrowers 


Sometimes, lenders will just not use any umbrella term and will call them by their product name. Some loan products that don’t require traditional income documentation include:

  • Bank statement loans
  • Profit & loss statements 
  • DSCR (debt service coverage ratio) loans
  • Asset depletion options
  • And more!


Stated Income Mortgages vs Traditional Mortgages


From the contrast in qualification requirements to the difference in costs, stated income mortgages are vastly different from traditional mortgages. If you’re currently shopping around for mortgages and aren’t sure how they differ, in this section, we’ll be covering what sets these two loan types apart. 


The first main difference between these two types of loans lies in the level of documentation required and flexibility. Today, lenders who offer stated income mortgages verify borrower’s income using alternative methods – meaning methods that are more suitable for those non-traditional income sources. Lenders may analyze a borrower's bank account statements over the past 12 or 24 months to determine their actual income deposits. Taking this income data into consideration along with other factors such as existing debts and credit score, the lender can then assess the borrower's capacity to repay the loan.


Whereas with a traditional mortgage, borrowers need to provide extensive documentation of their income with tax returns, W2s and pay stubs, proof of assets, debts, property information, credit and employment information and history. 


The next main difference is the availability of these two loan types. Stated income loans are now only offered by specialized lenders, which limits their availability. However, traditional mortgages can be found at banks, credit unions, and many other mortgage lenders. 


The last main difference comes from the reduced verification process, which results in typically higher interest rates, closing costs, and down payment requirements. With a stated income loan, borrowers should expect to see higher overall costs associated with the loan to compensate for the additional risk that the lender who offers them takes. In contrast, these costs are usually lower for a traditional mortgage since lenders have a more stringent verification process as a safeguard. 


If you’re debating between a stated income loan and a traditional mortgage, be sure to carefully consider your financial situation, individual needs and educate yourself on the various loan options that have evolved other than state income loans.


Stated Income Mortgages vs Non-QM Mortgages


The market has truly evolved to recognize self-employed professionals, real estate investors, retirees and other borrowers who might not accurately show income on their tax returns or be able to provide W2s. Today, alternative loan options other than stated income mortgages exist where the borrower isn't required to show the documentation that standard loans typically require like pay stubs, W2s or tax returns for loan qualification. 


These loan options fall under the non-QM loan category. Non-QM loans make home financing more accessible for people who come from diverse employment and financial backgrounds. Some of these non-QM loan options that don't require traditional income documentation like tax returns and W2s are bank statement loans, profit & loss statements, asset depletion options, DSCR loans, and construction loans -- all of which we offer at Defy.


A stated income mortgage is considered to be a type of non-QM loan, however, there are more developed and personalized non-QM loans than stated income mortgages that exist today for the same untraditional borrower. 


The benefits of other non-QM loan options include:


  • Greater flexibility when it comes to lending requirements, guidelines, and criteria
  • Options for those who can’t show tax returns or W2s
  • More options for entrepreneurs and self-employed individuals to verify their income
  • Opens up the door to homeownership for a wider variety of people
  • More flexible underwriting standards for those with liquid assets or foreign nationals
  • Typically faster pre-approval process


It’s important to research all of the various options available to make an informed decision based on your unique circumstances. 


Do Stated Income Mortgages Exist in 2024?


Yes, stated income mortgages still exist in 2024, though they’ve become less common in the mortgage industry due to stricter regulations and changes in lending practices. Now, showing income proof is non-negotiable. Lenders who do offer “updated (after 2010)” stated income loans verify borrower’s income using alternative methods for proof.


Stated income mortgages were popular in the past, but they were associated with higher default rates and contributed to the housing market crash in 2008. Following the financial crisis, regulatory bodies implemented stricter lending standards to prevent risky lending practices. In response to the crisis caused in part by loose lending practices, the Dodd-Frank Act established more rigorous standards around mortgage underwriting when it passed in 2010. 


The stringent standards made accessing home loans more difficult for some creditworthy borrowers – such as independent contractors and those who are self-employed. These individuals who would be capable of managing mortgage payments faced rejection due to the inability to fully prove their earnings via pay stubs, tax returns, or other mandated paperwork due to write-offs. 


Fortunately, the emergence of non-QM lending fulfills a societal need while upholding responsible lending practices. These alternative products consider context beyond strict income statements, assessing the complete financial picture through a holistic lens with more flexible documentation methods. 


At Defy, we do not offer stated income mortgages, however, we do offer alternative non-QM options for self-employed individuals such as bank statements, interest-only options and profit & loss statements, and more as similarly noted above.


Why Aren’t Stated Income Mortgages Offered by More Banks?


Stated income mortgages are offered by fewer banks today due to their association with higher risk and past lending practices that contributed to the 2008 financial crisis. These loans gained notoriety for potential fraud, as some borrowers inaccurately stated their income, leading to higher default rates. 


The limited availability of stated income mortgages stems from the combination of their history, regulatory changes, and inherent risk factors:


  • Past Misuse: Before the 2008 financial crisis, stated income loans fuelled the housing bubble with inflated property values and unsustainable lending practices. This widespread misuse raised red flags for many banks, resulting in lower overall risk tolerance.
  • Stricter Regulations: The Dodd-Frank Wall Street Reform and Consumer Protection Act implemented in 2010 imposed strict regulations on non-traditional lending, making stated income loans significantly more complex and expensive for banks to offer. These regulations include higher capital requirements, stricter documentation standards, and limits on loan-to-value (LTV) ratios.
  • Increased Risk: Stated income loans depend on self-reported income, inherently carrying higher risk for lenders. Without the hard evidence of pay stubs, W2s, or tax returns, it makes it challenging to verify an applicant's true financial profile, which increases the chances of default. 


Since regulatory authorities increased scrutiny after the financial crisis, this prompted many banks to limit, if not eliminate, the offering of stated income mortgages. All in all, banks have become more cautious, preferring comprehensive income verification to ensure responsible lending practices.

Top 6 Lenders Offering Stated Income Mortgages OR Alternatives (such as bank statement, asset depletion options, profit & loss statements, etc)


  • Truss Financial Group


Truss Financial Group specializes in unlocking homeownership possibilities for those with non-traditional income. Self-employed, business owners, and anyone facing challenges with providing documentation can find options here. They go beyond the typical mortgage, offering stated income loans, reverse mortgages, and jumbo options. Whether it's buying your first home, refinancing, or accessing equity, Truss focuses on flexibility and finding solutions for your unique situation. With a focus on premier service and personalized attention, Truss wants you to feel like a client for life.


  • Valor Lending


Valor Lending takes a holistic approach to mortgage lending, recognizing the diverse and unique income streams of today's workforce. They specialize in catering to self-employed individuals, entrepreneurs, and those with non-traditional income, offering a suite of solutions beyond the rigid requirements of traditional loans. Stated income loans bridge the gap for those without conventional paystubs, while jumbo options empower you to unlock your dream property. More than just a lender, Valor is a strategic partner, working closely with each client to create a personalized roadmap for financial success. With Valor Lending, you're not just getting a mortgage, you're investing in a trusted partner committed to your financial well-being and long-term goals.


  • Funding Pilot


Funding Pilot connects early-stage and high-growth businesses with qualified funding sources beyond conventional loans. Their platform utilizes algorithms and industry expertise to match businesses with suitable financial partners: venture capital, angel investors, debt financing, and even grants. Rather than relying on generic applications, Funding Pilot facilitates direct connections in a secure environment. More than just matchmakers, they also have seasoned professionals on staff to offer guidance and support for navigating the challenges of acquiring capital. Funding Pilot unlocks the potential for business growth by simplifying access to diverse funding, empowering entrepreneurs to secure the capital they need to thrive.


  • Quintessential Mortgage Group


Quintessential Mortgage Group empowers borrowers with diverse income streams to achieve their homeownership goals. They specialize in non-traditional lending solutions, including stated income loans for self-employed individuals and business owners, offering flexibility beyond traditional banks. Additionally, their portfolio encompasses conventional purchase and refinance options, catering to a broad range of borrowers. Their dedicated team is committed to personalized, attentive service, providing comprehensive guidance to navigating the mortgage process. Whether it's securing a competitive rate for your first home purchase, leveraging equity through a refinance, or exploring alternative solutions for non-traditional income, Quintessential Mortgage Group works closely with each client to craft a customized lending strategy. Backed by extensive industry experience and a focus on client satisfaction, Quintessential Mortgage Group offers a reliable and efficient path to unlocking homeownership and financial stability.


  • Custom Mortgage Inc


Custom Mortgage Inc. (CMI) empowers borrowers with diverse financial situations to achieve their homeownership dreams. Their expertise lies in designing individually tailored mortgage solutions catering to traditional and non-traditional income earners. CMI goes beyond standard products like purchase and refinance loans, offering options for self-employed borrowers and those with less formal income documentation through their stated income loan programs. They also specialize in jumbo loans for high-value properties and government-backed programs like FHA and VA loans for qualified borrowers. With a proven track record of success and a commitment to client satisfaction, CMI stands as a reliable partner in unlocking the doors to homeownership for borrowers across the spectrum.


  • Defy Mortgage (offers alternatives, not statement income mortgages)


Founded in 2023, Defy Mortgage was created with the simple goal of empowering dreams, enriching lives, and elevating the mortgage experience for non-traditional borrowers. They specialize in non-QM loans after recognizing that the number of self-employed individuals, real estate investors and gig workers is at an all-time high. As part of their product offerings, Defy offers bank statement loans, profit & loss statements, asset depletion options, interest-only options, DSCR loans and much more. Since its establishment, Defy’s CEO has been Todd Orlando, an experienced banker who has continually disrupted the financial services industry with a history of challenging the status quo. 


Stated Income Mortgage Requirements


Specific requirements for a stated income loans will vary depending on the lender who offers them. However, you can typically expect lenders who do offer them to consider these factors:


  1. Credit Score: While a specific score requirement varies, a higher credit score generally improves the chances of approval. 
  2. Loan-to-Value (LTV) Ratio: Lenders may have maximum LTV ratios, limiting how much of the property's value you can borrow.
  3. Down Payment: A larger down payment may be required to mitigate the lender’s risk and show that you’re committed to buying the property. 
  4. Alternative Income Verification: Lenders may ask for alternative income verification documents, such as bank statements, investment account statements, asset verification, and more. 
  5. Debt-to-Income (DTI) Ratio: Lenders may assess your existing debt obligations to gauge your repayment capacity.
  6. Reserve Funds: Some lenders may ask for reserve funds to cover several months' worth of mortgage payments.
  7. Property Appraisal: An appraisal of the property may be necessary to determine its value.
  8. Proof of Employment or Business: While not as extensive as traditional loans, lenders may still request some evidence of employment or business ownership.


Be prepared to provide more documentation than you would for a traditional loan or other non-QM option. The goal is for the lender to feel confident in your ability to repay the loan, even without traditional income verification.


Stated income mortgages have different requirements depending on the lender


Stated Income Mortgage Property Requirements


The property requirements for a stated income loan can vary among lenders who do offer them, but common considerations include:


  • Property Type: Lenders may have preferences for certain property types, such as single-family homes or multi-unit properties.
  • Property Value: The property's appraised value impacts the loan amount and loan-to-value ratio.
  • Condition of the Property: Lenders may assess the property's condition to ensure it meets certain standards.
  • Location: The property's location can impact its eligibility for a stated income loan since some lenders have preferences for specific regions or markets.
  • Intended Use: Lenders may inquire about how you plan to use the property, whether it's a primary residence, investment property, or second home.


Remember to check with individual lenders regarding their specific property requirements for stated income loans, as these can vary based on the lender's policies and risk assessment.


Pros and Cons of Stated Income Mortgages


Stated income mortgages offer a path to homeownership for individuals with non-traditional income but come with some drawbacks and risks. Before opting for a stated income loan, it’s essential to carefully weigh the pros and cons, while also considering your financial situation.. 


Here are some pros and cons to think about before getting a stated income loan: 




  • LTV Flexibility: Potentially higher loan-to-value ratios (LTVs) compared to traditional loans, allowing you to borrow a larger portion of the property's value.
  • Streamlined Application Process: Requires less income-related paperwork, making the loan approval process faster and more straightforward.
  • Asset-Based Borrowing: Some lenders may consider assets like stocks, bonds, or real estate in addition to income, offering options for asset-rich borrowers with less documented income.
  • Privacy: Borrowers may appreciate the reduced intrusion into their financial details compared to traditional loans.




  • Notorious History: The lax requirements for stated income loans allowed borrowers to declare their income without any verification. These lending practices in the early 2000s led to a housing bubble, which eventually turned into the 2008 financial crisis.
  • Larger Down Payments: Often require higher down payments, typically 20-25% or more, to mitigate the lender's risk.
  • Potential for Overstating Income: Borrowers may be tempted to inaccurately state their income which they then can back up through proof, leading to potential financial difficulties and increased default risks. Lying about income is never ok.
  • Limited Availability: Since these loans are considered riskier, fewer lenders offer them, reducing options for borrowers.
  • Stricter Eligibility Requirements: Borrowers may need a higher credit score, larger down payment, or other compensating factors to qualify.
  • Higher Interest Rates: Due to the increased risk, stated income mortgages typically have higher interest rates compared to fully documented conventional loans.


Stated Income Jumbo Loans


Stated income jumbo loans are specialized mortgage products that cater to high-income individuals seeking financing beyond conventional loan limits. For lenders who offer them, these loans are designed for borrowers with substantial assets and complex income structures. While providing flexibility for self-employed or high-net-worth individuals, stated income jumbo loans often require strong creditworthiness and may need a larger down payment. 


Stated Income Loans for 1099 Contractors


Considering that 1099 contractors are typically freelancers and independent contractors, their income may vary from month to month and it may be more difficult to prove their consistent income for a traditional loan. Getting a stated income loan would allow them to go through a streamlined application process and still be able to qualify for a home loan. However, and due to the cons associated with stated income mortgages, other options for 1099 contractors such as bank statements, profit & loss statements and interest-only options are commonly better options. For more trends, tips and key factors for 1099 contracts and self-employed borrowers to consider (stated income mortgages not included), check out our market report.


Stated Income Loan Programs with a Recent Bankruptcy


Getting a stated income loan with a recent bankruptcy can be rather challenging since lenders often consider recent bankruptcies as indicators of higher risk. Lenders who offer stated income loans still assess the overall financial stability and creditworthiness of borrowers. Having a recent bankruptcy on your record may lead to higher interest rates, stricter eligibility requirements, or even limited approval options. It’s recommended to consult with individual lenders, as their specific policies vary.


Stated Income Mortgage Rates


Stated income mortgage interest rates are typically higher than those for traditional loans due to the perceived increased risk associated with limited income documentation. These loans also commonly have higher rates than non-QM options.


Most lenders who do offer these stated income loans compensate for the potential uncertainties by adding a premium on the loan cost. Keep in mind that exact rates vary based on factors such as credit score, down payment, and the lender's policies. Prospective borrowers should carefully consider the impact of higher interest rates on the overall affordability of the loan.


Stated Income Mortgage Alternatives (Non-QM Loans)


There are plenty of alternative options to consider instead. Even for those who are self-employed or have non-traditional income sources, there are other loans available that rely on alternative income or asset verification methods depending on your needs. Here are some other options and ones that we specialize in that are non-QM loans:


  1. Bank Statement Loans: Bank statement loans are mortgage programs where lenders assess a borrower's eligibility based on their bank statements rather than traditional income documentation. These loans are suitable for self-employed individuals or those with variable income sources.


  1. Profit & Loss Statement Loans: Profit & loss statement loans (P&L loans) are a type of mortgage that uses the borrower’s profit & loss statements from their business as a key factor during the approval process. P&L loans are designed with businesses in mind and these statements can give lenders a broad picture of the company’s financial performance and their ability to repay the loan. 


  1. DSCR Loans: Debt Service Coverage Ratio (DSCR) loans are commercial real estate loans where lenders evaluate a property's ability to generate income to cover its debt obligations. The DSCR, calculated by dividing net operating income by debt payments, helps assess the property's financial strength for loan approval.


  1. Asset Depletion Options: Asset depletion loans are mortgage financing options where a borrower's liquid assets, such as savings, investments, or retirement accounts, are considered as a primary factor in determining eligibility. Lenders calculate the depletion rate of these assets to assess the borrower's ability to repay the loan.


  1. Interest-Only Loans: Interest-only loans are a type of mortgage where the borrower only has to pay interest payments, rather than principal and interest, for an initial period of the loan term, which is typically between five to 10 years. These loans give borrowers the opportunity to have a lower monthly payment during the interest-only period of their loan. 


Tips for Securing Loan Alternatives to Stated Income Mortgages


Navigating alternative financing can be very rewarding. In this section, you’ll discover valuable insights and tips for securing loans alternative to stated income mortgages. Whether you're self-employed, have irregular income, or want flexibility, these tips can help you work towards financing options tailored to your unique financial circumstances.


  • Increase Income: Increasing your income will help lenders see that you have the ability to repay your monthly mortgage payments.
    • Determine If You're Classified as Self-Employed/1099: Owning just 25% of a business or having one partner classifies you as self-employed. Similarly, 1099 income as a freelancer or independent contractor puts you in the same category.
  • Get Pre-Approved: Getting pre-approved will give you a better idea of your maximum loan amount and interest rate. Click here to get a pre-approval from Defy. 
  • Monitor Credit Score: Credit score is a large factor in qualifying for any type of loan. It shows lenders that you have a proven track record of paying your debts on time.
  • Consider a Non-QM Lender: Non-QM lenders specialize in non-QM loans and have options for people who don’t fit the profile of a traditional borrower or have unique circumstances. The lending system should facilitate, not hinder, those bold enough to forge their own path.  


Tips to secure stated income mortgage alternatives


Key Takeaways

The original stated income mortgages, which no longer exist, did not necessitate proof of income confirmation or income paperwork from the borrower. 


For lenders who do offer these loans, the lenders offer an updated version of stated income mortgages that now require borrowers to show proof of income through alternative methods. 


The widespread use of these original state income mortgage loans were a key contributor to the 2008 financial crisis, as many homebuyers were able to obtain loans beyond their repayment ability, ultimately defaulting in large numbers. 


While the original version of stated income loans have been discontinued, some alternative options exist today. 



What Is a Stated Income Mortgage?


Stated income mortgages still exist today through lenders who offer them, but they are significantly different than how they were. Now, applicants can no longer state their income on an application without providing some form of proof. Borrowers who do obtain stated income mortgages from lenders who offer them are now required to have higher credit scores and larger down payments to mitigate the risk that’s posed to the lenders providing the loan. Stated income mortgages pre-2008 financial crisis are very different. Borrowers were allowed to just “state” their income without any form of proof or verification. This led to high default rates and contributed significantly to the 2008 crash.


Who Are Stated Income Mortgages For?


Stated income loans are primarily designed for those who don’t have traditional income documentation, such as self-employed individuals, small business owners, and others with non-traditional or variable income streams. However, there are plenty of alternative and newer options for those who don’t have traditional income documentation to now consider in the non-QM space such as bank statements, P&L statements, and more.


Can You Still Get A Stated Income Mortgage Without Showing Proof Of Income?


No. For lenders who do offer these loans, the lenders offer an updated version of stated income mortgages that now require borrowers to show proof of income through alternative methods. 


Are Stated Income Mortgages Available for Investors?


Yes, stated income loans are often available for investors seeking financing without traditional income documentation from lenders who offer them. Again, there are plenty of alternative and newer options for real estate investors to now consider, like DSCR loans.


Do I Need to Be Self-Employed for a Stated Income Loan?


Not necessarily – Being self-employed is not always a requirement for a stated income mortgage. Eligibility criteria may vary among lenders who offer stated income loans.


Is the Stated Income Loan Program Available If I Receive a 1099?


Yes, the stated income loan program caters to those with non-traditional income sources, which include individuals who receive 1099s. However, these programs are only available for lenders who offer stated income mortgage programs.


Are Stated Income Mortgage Loans Still Available?


Yes, stated income mortgage loans are still available, but they’re not as common now that stricter regulations are in place. As of 2010 (Dodd-Frank Act), borrowers who borrow from a lender who offers these loans must provide proof of income through bank statements, tax returns, or other financial documents to prove their ability to repay the loan.


In Which States Are Stated Income Loans Available?


The availability of stated income mortgages varies by state. It’s recommended to check specific state regulations and lender offerings in your area. 


Who Offers Stated Income Mortgages?


Stated income mortgages are offered by select lenders – Defy not being one of them. Although lenders of stated income loans can be limited, it’s important to research lenders before choosing one regardless of which loan option you choose.


Are Stated Income Home Equity Loans Available?


Stated income home equity loans are available, but quite rare. Typically, alternative income verification is preferred by lenders for home equity loans. 


Can I Get a Cash-Out Refinance Loan with a Stated Income Loan?


Getting a cash-out refinance loan with stated income is possible, but is usually rare and there are limited options. 


Where Can I Apply Online for a Stated Income Loan?


There’s no dedicated platform to apply online for a stated income loan. It’s recommended to research lenders that offer stated income loans and apply directly. 


How Much Documentation Is Required for a Stated Income Mortgage?


While documentation requirements vary by lender, you can expect to provide documents such as:


  • Loan application with a self-declaration of your income
  • Credit report
  • Alternative income verification (e.g. bank statements, investment account statements, etc.)
  • Asset verification
  • Property information


Can You Get a Mortgage Without Tax Returns with a Stated Income Loan?


Yes, you can get a mortgage without tax returns with a stated income loan. 


How Big is the Down Payment for a Stated Income Loan?


The down payment for a stated income loan can vary, but 20-25% or even higher is fairly common. Borrowers should check with lenders for specific requirements.


Can I Get a Gift of Equity to Purchase a Relative’s Home with a Stated Income Loan?


It's possible to use a gift of equity to purchase a relative's home with a stated income loan, subject to lender approval. Remember to check with your specific lender about their gift of equity policies for stated income loans.


Is the Interest Rate For Stated Income Mortgages the Same or Higher Than a Conventional Loan?


Interest rates for stated income loans are often higher than conventional loans, but it ultimately depends on the lender, their risk assessment, and the loan details. 


Are the Closing Costs Higher for Stated Income Loans?


The closing costs for stated income mortgages can be higher compared to traditional loans. Overall, you should expect to pay at least 2-3% of the loan amount for a stated income loan, typically higher than the 1-2% range for traditional loans.


Can You Buy Land with Stated Income Loan Programs?


While rather rare, it might be possible to buy land with stated income loan programs depending on the lender and their policies. 


Are Stated Income Loans Illegal?


No, stated income loans are not illegal, but they’re more heavily regulated and restricted due to past misuse and now require proof of income for those lenders who do offer them. If you are a borrower whose income isn’t verified using any traditional income verification methods such as pay stubs, W2s, or tax returns, consider these alternatives:

  • Bank statement loans
  • Profit & loss statements
  • DSCR loans
  • Interest-only options 
  • Asset depletion options

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