NO Tax Returns Texas Mortgage Lenders use bank statements to verity income.
PROPERTY TYPES- TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:
● Single family homes, Town homes, Condos, (Warrantable & Non-Warrantable), PUDs, 2-4 units.
● No fixer Uppers!
INELIGIBLE PROPERTIES TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● Site > 10 Acres, High-rise Condo in Dade/Broward Counties, Florida (8+ stories)
LOAN TERMS – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● 5 ARM or 30 Year Fixed
● 10 Year / 40 Year Term IO
● Index is 1 year LIBOR
● No pre-payment penalty
● All loans require impounds for tax and insurance
LOAN AMOUNTS TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:::
● $100,000—$3,000,000. Loan Amounts over $1.5M requires 2nd
HOUSING HISTORY/CREDIT EVENT SEASONING TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● Housing history—0x30. For housing delinquency, ask about pricing adjustments.
● Bankruptcy/Foreclosure—3 year seasoning. For less than 3 years, see pricing adjustments.
● Short Sale/Deed-in-Lieu/Modification—2 year seasoning. For less
than 2 years, see pricing adjustments.
INCOME/DTI TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● Max of 50% DTI
● Residual Income—$1,500 per household plus $500 1st child, $250
thereafter. Child maximum $1,500.
CREDIT SCORE/TRADELINE REQUIREMENTS TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:::
● 3 trade lines reporting for ≥ 12 month; or 2 trade lines reporting for ≥ 24 months with activity in the past 12 months. Borrower must have housing history or one of the trades must have $5,000 high credit/limit.
● Credit Score The middle score of the primary wage-earner is used for pricing and LTV purposes.
INCOME DOCUMENTATION – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:
● Alt Doc – 12 or 24 months personal or business bank statements or 1099’s.
Min. 2 years history of self employment required. Also available for gratuity earners● Full Doc – 1 or 2 years W-2, paystubs, tax returns or K1’s
● Use Lease agreements in lieu of schedule E are treated as ALT Doc..
● Asset Only—100% of amount needed to amortize loan plus monthly debts for 60
months (Cash-out not allowed)
● Asset Assist—Assets divided by 60 is added to income. Max 25% of total income.
PAYMENT SHOCK – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:::
● Maximum 300%. (First time home buyer 250%)
TAX LIENS AND JUDGMENTS – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:
● All tax liens and judgments must be paid at closing.
COLLECTION/CHARGE-OFF ACCOUNTS – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● Collections and charge offs need to be paid off except:
– Medical Collections.
– Collection accounts older than 2 years.
ASSETS / RESERVES – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● 6 months > 80% LTV, 3 months > 65% and ≤ 80% LTV .
● Cash-out may not be used to satisfy reserve requirement when LTV > 80%.
● Gift funds for down payment ok, Borrower must contribute 5% own funds.
LISTED PROPERTIES – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● Must be off market for 6 months.
OCCUPANCY – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS::
● Owner Occupied and 2nd Home
● First-time Homebuyers with 12 months canceled rent checks, 85% max LTV, 680
General Refinance Requirements- TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:: Rate/term refinance and cash-out refinance transactions are allowed.
Determining Loan-to-Value If the subject property was purchased ˃ 12 months from application date, the appraised value must be used to determine loan-to-value. If the property was purchased ≤ 12 months from application date, the lesser of the current appraisal value or previous purchase price plus documented improvements (if any) must be used. The purchase settlement statement and any invoices for materials/labor will be required.
Rate & Term Refi / Limited Cash Out – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS: No seasoning of first mortgage (no minimum number of payments required). If owned less than 12 months (recorded transfer date to application date of the new loan), the LTV is be based on lower of appraised value or the original sales price. If owned more than 12 months, (recorded date to application date of new loan), the LTV is based on the current appraised value. Maximum cash in hand is the lessor of 2% of the principal of the new loan amount or $2000. Final Closing Disclosures or Settlement Statements required from any transaction within past 6 months. If previous transaction was cash-out or if it combined a first and non-purchase money subordinate into a new first, loan to be coded cash out. If new transaction combines a 1st and non-purchase money 2nd into a new 1st loan, it is considered cash out. Must demonstrate there is a Benefit to the borrower by utilizing the CMS benefit to borrower form currently in use through Encompass for refinance transactions.
Listed For Sale or Purchase- TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS:
To be eligible for either a rate/term or a cash-out refinance, the subject property must be taken off the market on or before application date, provide a letter of explanation for the MLS listing and statement of intent to retain the property for 12 months after closing. For cash-out transactions, if the subject property was listed for sale in the 6 months prior to application date, a 10% LTV reduction from the maximum available for the specific transaction is required. The lesser of the most recent list price or the current appraised value should be used to determine loan-to-value for both rate/term or cash-out transactions.
General Property – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS: must be in average or better condition. Properties in C5 or C6 condition are not acceptable. Deferred maintenance is allowed subject to the requirements below.
Deferred Maintenance – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS: No Tax return bank statement mortgage permits appraisals to be based on the “as is” condition of the property provided existing conditions are minor and do not affect the safety, soundness, or structural integrity of the property, and the appraiser’s opinion of value reflects the existence of these conditions. Deferred maintenance is typically due to normal wear and tear from the aging process and the occupancy of the property. While such conditions generally do not rise to the level of a required repair, they must be reported. Examples of minor conditions and deferred maintenance include worn floor finishes or carpet, minor plumbing leaks, holes in window screens, or cracked window glass.
Appraisal Updates– TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS: Permitted. Follow guidelines and acceptable extension dates. The appraisal may be no older than 240 days at closing with an appraisal update.
Property Repairs – TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS: All property repairs must be completed prior to closing with no exceptions. Escrow holdbacks are not permitted. Appraisal 1 Full appraisal required. Exterior and Interior inspection. Color photographs required Appraisal Review Due Diligence Product Restrictions The Appraisal Review Process requires a secondary due diligence product to support the appraised value for the transaction.
To utilize the Fannie Mae Collateral Underwriter (CU) score, all of the following must be met:
Loan amount < $1,000,000, and
CU Score ≤ 2.5
The following require a Desk Review (ineligible for CU):
Any loan where the LTV > 80%, or
CU Score > 2.5
The following require a Second Full Appraisal:
Loan amount ≥ $1,000,000
HPML Property Flip Transactions
HPML New Construction Properties with one or more title transfers within 180 days of the purchase contract date or any title transfer after the
purchase contract date. Please note: title transfers from a builder to a wholly owned subsidiary of the builder are considered a “change of
ownership” and require a Second Full Appraisal.
When two appraisals are required, the lower of the two values must be used to determine value.
The following requires a Carrington Capital Management (CCM) review:
Appraised value ≥ $1,500,000. When two appraisals are present the lowest value is used.
Desk Reviews, Field Reviews, and Second Full Appraisals, when required, must be ordered from a No tax return bank statement mortgage lenders-approved AMC. A Second Full Appraisal
must be completed by a different AMC and a different, independent appraiser than the first appraisal. No tax return bank statement mortgage lenders reserves the right to request
additional appraisal products at our discretion based on review of the appraisal and loan file.
See Carrington Prime Advantage Underwriting Guidelines for full details on the available review products.
Mixed Use Properties-TEXAS NO TAX RETURN REFINANCE OR BANK STATEMENT MORTGAGE LENDERS mortgage lenders will allow for mortgages that are secured by properties that have a business use in addition to their residential use, such as a property with
space set aside for a day care facility, a beauty or barber shop, or a doctor’s office.
The following special eligibility criteria must be met:
The property must be a one-unit dwelling that the borrower occupies as a principal residence.
The borrower must be both the owner and the operator of the business.
The property must be primarily residential in nature.
The dwelling may not be modified in a manner that has an adverse impact on its marketability as a residential property.
The appraisal requirements for mixed-use properties must:
provide a detailed description of the mixed-use characteristics of the subject property;
indicate that the mixed use of the property is a legal, permissible use of the property under the local zoning requirements;
report any adverse impact on marketability and market resistance to the commercial use of the property;
report the market value of the property based on the residential characteristics, rather than of the business use or any special business-use
modifications that were made.
report that no modifications have been made that would adversely affect marketability
A confirmation of the appraiser’s review will be performed by a Due Diligence (DD) firm. If the DD firm disagrees with the appraiser, DD findings will
take priority over appraiser findings.