How To Qualify Bank Statement Portfolio Loan Programs

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This BLOG On Bank Statement Portfolio Loan Programs Was UPDATED And PUBLISHED On February 25th, 2020

How To Qualify Bank Statement Portfolio Loan Programs

Conventional and FHA Loans have their own mortgage guidelines. Portfolio Loan Programs are mortgages where lenders keep on their books and do not sell them to the secondary market.

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

In this article, we will discuss and cover How To Qualify Bank Statement Portfolio Loan Programs.

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 the following:

  • bank statement mortgage loans
  • Fix and flip investment property loans
  • Jumbo Mortgages With 5% Down Payment With No Mortgage Insurance
  • condotel financing
  • non-warrantable condo mortgages
  • 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

Why portfolio loans are also called non-compliant loans

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

  • Both FHA and conventional mortgage loans have specific appraisal requirements
  • Appraisals require three recent comparable sales similar to the subject property
  • If there are no recent comparable sales similar to the subject property within a mile radius, then lenders cannot approve valuation of the property
  • However, homebuyers can qualify for a portfolio loan where they will lend on other criteria
  • This holds true even though there are no recent comparable sales
  • A portfolio lender has the luxury to do that

This is because they are keeping mortgage loans they fund and not selling it on the secondary market.

Unique And Special Properties

Homebuyers 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 need 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

In cases like these, a luxury home purchaser needs to obtain a portfolio loan from a portfolio loan mortgage lender.

Portfolio Loan Guidelines Are Different

What are the guidelines for portfolio loans are different

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

  • On cases where there are no appraisal comparable, the best bet borrowers has is to seek the guidance of portfolio lender
  • This is so loan officer can match the borrower with a portfolio loan lender like Gustan Cho Associates
  • 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 is no waiting period after bankruptcy, foreclosure, short sale with NON-QM Loans
  • Gustan Cho Associates 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 262-716-8151 or text for a faster response. Or email us at gcho@gustancho.com.

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