How To Qualify Bank Statement Portfolio Loan Programs

This BLOG On Bank Statement Portfolio Loan Programs Was UPDATED On June 25, 2017

Conventional Loans and FHA mortgage loans have their own mortgage guidelines. Portfolio Loan Programs are mortgages that a lender keeps on their books and does not sell them to the secondary market.

  • The main reason why government and conventional loans are so strict is due to the fact that lenders needs to follow guidelines if FHA is going to insure them and because they need to sell these loans to secondary market.
  • With FHA Loans, if lenders did not follow FHA Guidelines on a FHA Loan, HUD, the parent of FHA will not insure that loan.
  • Conventional Loans are called Conforming Loan because they need to conform to Fannie Mae and/or Freddie Mac Guidelines. 
  • If the mortgage loan package does not conform with Fannie Mae and/or Freddie guidelines, the lender cannot sell it to Fannie Mae and/or Freddie Mac and will end up keeping the mortgage loan in their portfolio.

How Does Portfolio Loan Work?

A portfolio loan is a mortgage loan where a lender is not concerned about selling it on the secondary market. Examples of portfolio loans are bank statement mortgage loans, condotel financing, non-warrantable condo mortgages, and NON-QM Loans.

  • A portfolio loan can be sold but the majority of them are kept in the lender’s portfolio. 
  • The lender uses their own funds and keeps the mortgage loan for the term of the loan.

 Portfolio Loans Are Also Called Non Conforming Loans

Home buyers who need to purchase residential property but cannot get comps on the appraisal, the chances are they will not qualify for a FHA or a conventional mortgage loan.

  • Both FHA mortgage loans and conventional mortgage loans have specific appraisal requirements where three recent comparable sales similar to the subject property is required. 
  • If there are no recent comparable sales similar to the subject property within a mile radius, then lenders cannot approve the property. 
  • However, home buyers can qualify for a portfolio loan with a portfolio lender where they will lend on other criteria even though there are no recent comps. 
  • A portfolio lender has the luxury to do that because they are keeping mortgage loan they fund and not selling it on the secondary market.

Unique And Special Properties

Home buyers or high end luxury homes or unique properties with no comparable sales can qualify for portfolio loan programs. Bank Statement Mortgage Loans for self employed borrowers are also classified under Portfolio Loan Programs.

  • If that is the case, the chances are that borrowers will not qualify for a conforming conventional or FHA mortgage loan. 
  • On conforming conventional mortgage loans and FHA insured mortgage loans, there needs to be at least three recent nearby comparable sales on the appraisal. 
  • If there are no three nearby recent appraisals, the mortgage loan borrower cannot qualify for that particular property under government or conventional loans. 
  • On cases like these, a luxury home purchaser needs to obtain a portfolio loan from a portfolio loan mortgage lender.

Portfolio Lending Guidelines Are Different

Any unique or odd residential properties will have a hard time getting comparable on an appraisal. Each portfolio lender has their own lending requirements.

  • On cases where there are no appraisal comparable, the best bet a mortgage loan borrower has is to seek the guidance of a mortgage broker so the broker can match the mortgage loan borrower with a portfolio loan lender.
  • With Bank Statement Mortgage Loans For Self Employed borrowers, there are lenders that require 24 months bank statements while a few lenders require 12 months bank statements.
  • There are no waiting period after bankruptcy, foreclosure, short sale with NON-QM Loans. 
  • The Gustan Cho Team offers no-doc fix and flip portfolio loans and non-doc investment property loans where income documentation is not required by borrowers.

Home Buyers who do not qualify for government or conventional loans and need to get qualified for a portfolio loan can contact us at 1.800-900-8569 or email at gcho@gustancho.com.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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