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Within the last year, new programs have evolved allowing borrowers who cannot qualify for conventional or government loans to qualify for non-traditional mortgage programs.

Borrowers typically are either self-employed borrowers who cannot qualify due to major expense deductions on tax returns ultimately showing low income or borrowers who have suffered from economic events such as bankruptcies, foreclosures, short sales or multiple mortgage late payments.

For self-employed borrower who cannot show enough qualifying income, programs are available using an average of 24 month’s deposits shown on bank statements. Borrowers with large amounts of liquid assets may be able to use monthly withdrawals or loan term amortization to qualify for conventional loans. An example of asset depletion would be such that If you have an account with a $500,000 balance, you can divide the balance by the term of the loan (30 years= 360 months), $500,000 divided by 360 months = $1338.39 can be applied towards your qualifying income without withdrawing any funds. The other option would be to set up a monthly withdrawal program for a specific monthly withdrawal which can be used to add to your present qualifying income. You would need to have at least enough liquid assets to maintain the payments for a period of 3 years.

Bank statement programs allow funding up to 90% of the property’s value. If you can use the monthly withdrawals or amortization of liquid assets added to your taxable income, you can finance up to 95% of primary home purchases or 85% of investment property purchases.

For borrowers who have suffered from economic events and lack the normal seasoning required for conventional and FHA mortgages, new programs are available for borrowers with no seasoning requirements or lighter requirements at low, affordable rates.

These programs are available for primary homes, second homes and investment properties. Even unusual properties such as unwarrantable condos, condotels and rural properties may be acceptable on a case by case basis. Loan amounts start at a minimum of $100,000 up to $3,000,000.

Most non-prime programs are 7/1 ARMs but 30 year fixed programs are available for .25% higher rate. Most non-prime borrowers use the program as a bridge loan and refinance when the seasoning or income are no longer obstacles to qualify for conventional financing.

The important thing to know about this type of mortgage is that it normally will require more cash down than the traditional programs. Also, borrowers are also required to have 6 to 12 month’s reserves after closing. For example, if your monthly payment is $2500, you’ll be required to have a minimum of $15,000 to $30,000 after closing, depending on the loan to value.

Since these programs are designed for those with unique situations, it’s best to call us and discuss your scenario to determine your eligibility. For more information, call Joe Bell, Innovative Mortgage Services, St. Petersburg, FL (727) 527-1454 or email An online application is available at

Posted by Joe Bell on July 10th, 2016 8:49 PM