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Alternative Stated Income Mortgage
Provide your self-employed borrowers with more choices and no income verification requirements

Related Products

Our Alternative Stated Income Mortgage is designed specifically for your self-employed borrowers with high credit quality and large down payments.

With this option, you can offer self-employed borrowers time savings, convenience and financial privacy by eliminating substantial amounts of income documentation. Your borrower only needs to provide a signed IRS Form 4506 or 8821, verifying only income history and source, not amount. By eliminating the need for the large amount of income documentation and complexities inherent in self-employment, you'll be able to offer quicker turnaround times for loan approval and loan closing. Plus, you'll foster a more positive customer relationship by shifting the emphasis from documentation to your borrower's strong credit and capacity.

Product Features

Effective January 2, 2009, we will no longer purchase Alternative Stated Income Mortgages. Please refer to our October 17 Single-Family Seller/Servicer Guide Bulletin [PDF 183K] for more information.

Feature Requirements

Property Type
  • 1-unit primary residences, including condos and PUDs.

Eligible Mortgage Products
  • 15-, 20-, 30- and 40-year fixed-rate mortgages
  • 5- and 7-year balloon/reset mortgages
  • Most standard ARMs

Transaction Type
  • Purchase only

Maximum LTV Ratios (without secondary financing)
  • 75% LTV

 

Down Payment or Closing Costs
  • The greater of $25,000 or 25% down payment required from borrower funds.
  • Down payment amount may come from cash or other certain equity. Gifts, grants and sweat equity are not permitted.

Eligibility/Underwriting
  • Loan Prospector® Accept with a minimum Indicator Score equal to or greater than 720.
  • Non-Loan Prospector mortgages with a minimum Indicator Score equal to or greater than 720.
  • Maximum 41% debt-to-income ratio.
  • 2-year credit history required, with three open trade lines that have been active for two years.
  • Borrower must be self-employed in the same business for at least two years.
  • No 30-day late payments in the last 12 months.
  • No bankruptcy, foreclosure or deed-in-lieu of foreclosure within the last seven years.
  • The Seller is not required to obtain Federal business tax returns, balance sheet or YTD profit and loss for the borrower's business.

Execution Options
  • Servicing-retained Cash
  • WAC ARM Cash
  • Fixed-rate Guarantor
  • WAC ARM Guarantor
  • MultiLender Swap

Delivery Fees
  • An Alternative Stated Income Mortgage postsettlement delivery fee applies. Other delivery fees may apply based on the individual characteristics of the mortgage. See Single-Family Seller/Servicer Guide (Guide) Guide Exhibit 19 [PDF 183K] for details on applicable fees.

Special Delivery Requirements
  • You must deliver all mortgage data required by Form 11 or Form 13SF, as applicable.
  • Offering Code 510

Single-Family Seller/Servicer Guide
  • Refer to Guide Section 37.22 and Section 17.32.


Download an Alternative Stated Income Mortgage fact sheet [PDF 185K] for more details.

Lender Benefits

The Alternative Stated Income Mortgage helps you:

  • Strengthen your offerings by providing a more flexible, streamlined and lower-cost product to your self-employed borrowers through a combination of reduced documentation and competitive pricing.
  • Manage your pipeline more effectively and more efficiently with both cash and securities execution options.
  • Cross-sell other services you offer that appeal to customers with high credit quality and large amounts of cash.

Benefits for Your Borrowers

The Alternative Stated Income Mortgage helps your self-employed borrowers:

  • Purchase their homes faster and with fewer documentation requirements than traditionally possible.
  • Maintain more financial privacy and confidentiality.
  • Maximize financing flexibilities when Alternative Stated Income is coupled with ARM or balloon/reset mortgage advantages.

For More Information

Training Opportunities

Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.



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