Looking for a Stated Income Commercial Loan? Here is What You Need to Know
There are various reasons why you might not be able to qualify for a loan from a bank or another financial institution. These include:
- Inability to prove your income.
- Poor borrower credit.
- Property constraints.
- Tenant issues.
- High Debt Service Credit Ratio (DSCR).
- Seasoning issues.
All these situations prevent you from getting the cash you need from major financial institutions. However, you have an option in the form of a stated income commercial loan.
What Does “Stated” Mean?
This program allows you to state your personal or business income to qualify for the loan. However, the level of “stated” varies from one lender to another. Some lenders will require no documents from you, while others will require you to produce some documents to qualify.
For one, you need to know that you don’t have to provide any personal or business income tax returns, nor monthly or annual reports. However, there are some fundamental requirements you need to fulfill. These include:
- A minimum DSCR of 1.0.
- A rental appraisal to be performed to qualify your income.
- A minimum of 680 FICO
- A maximum of 70 percent Loan-to-Value (LTV) ratio.
If you qualify, you get access to a loan with typical fixed periods of 3 – 7 years with amortization of between 25 – 30 years.
How can You Get the Best Rates?
Drastic changes in the past few years have led to more restrictive availability and stricter terms for getting a stated income commercial loan. This has made many lenders to stop offering these loans. However, trust Velocity Commercial Funding to get a reliable lender for you. We are a team of professionals who work with only the best lenders on the market. The clients we have worked with so far have managed to close their loans in a very short time.