Low-doc, a.k.a. stated-income, loan programs ruled the loan industry in this country until the economy collapsed in 2008. Many qualified and non-qualified buyers enjoyed the convenience of these easy-to-qualify-for loan programs.
A stated income loan program allows a buyer to “state” their income without having to prove it with tax returns and paystubs.
Today, low-doc loan programs are still available to higher income earners with large cash assets and excellent credit.
Here are today’s standard low-doc loan program requirements:
- 30%-40% minimum down payment.
- $100k (or more) in cash reserves post-close.
- 720 minimum FICO score.
- Excellent credit. No previous credit issues such as a bankruptcy, short sale or foreclosure.
- Single Family Residences only.
No longer designed for your average home buyer, banks and investors tend to offer these low-doc or stated-income programs for the sole purpose of establishing a business relationship with high-income earners. For those select few, low-doc loan programs are a convenient way to qualify for a home loan.