What are Portfolio Loan Programs

This guide covers portfolio loan programs. We will cover what a portfolio loan is. We will compare the benefit of portfolio loan programs versus agencies mortgage loans. 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 HUD guidelines.

If lenders did not follow HUD 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 or Freddie Mac Guidelines. If  loan package does not conform with Fannie Mae or Freddie guidelines, the lender cannot sell it to Fannie Mae or Freddie Mac. If they cannot sell it to Fannie Mae and Freddie Mac, they will end up keeping the mortgage loan in their portfolio. In the following paragraphs, we will discuss what a portfolio loan is and how it works.

What is a Portfolio Loan?

A portfolio loan is a type of mortgage loan that is originated , processed, underwritten, and funded by a lender. Once the portfolio loan is oringated and funded, the loan is held by the lender. Porfolio loan is held by the lender’s own portfolio instead of being sold on the secondary market to a government-sponsored enterprise (GSE) like Fannie Mae or Freddie Mac, or to another investor.

What Are The Characteristics of a Portfolio Loan

A portfolio mortgage lender is a lender that originates, processes, underwrites, and funds the porfolio loan and the portfolio mortgage loan is kept on the lender’s own portfolio balance sheet instead of selling it to a secondary market investor. Portfolio lenders have more flexibility in their underwriting criteria compared to conforming loans sold to GSEs. This allows them to serve borrowers who may not qualify for traditional mortgages.

Key Portfolio Loan Programs Available at Gustan Cho Associates

1. No Income Documentation Loans

• Perfect for borrowers who don’t have a regular income to document.
• Suitable for self-employed, investors, or those with non-traditional income.

2. Asset Depletion Mortgages

• It enables borrowers to be assessed based on their assets instead of consistent income.
• It is ideal for retirees or individuals with substantial investments rather than a paycheck.

Both programs offer the flexibility that conventional and government loans lack, making them increasingly popular.

Understanding Asset Depletion Mortgages: No Income Required

One of the most in-demand portfolio loan programs is the Asset Depletion Mortgage. Asset depletion loans are built for borrowers who have substantial assets but may lack a steady income. This loan program allows lenders to use a borrower’s assets — stocks, bonds, mutual funds, or gold — to calculate eligibility. Here’s how it works:

1. Calculate Your Available Assets: Lenders consider 100% of liquid assets like cash or checking accounts. Due to market volatility, they generally use 70% for stocks and bonds.
2. Convert Assets to Income: The lender divides a portion of your total assets by 360 (for monthly installments) to determine your qualifying income.
3. No Income Documentation: Traditional income verification (tax returns or W-2s) isn’t required. Your assets take the place of income for qualifying.

Asset depletion loans can provide loan amounts from $100,000 to $3 million, making them a solid choice for high-net-worth individuals looking to buy or refinance a property.

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.

Who Benefits from Asset-Based Lending?

These portfolio loan programs are great for borrowers who:

• They don’t have a steady paycheck but have significant assets.
• Need flexibility around income documentation.
• They have experienced recent life changes (like retirement) that affect their taxable income.

Common borrowers benefiting from asset-based loans include:

• Retirees: Those with substantial retirement savings but no regular income.
• Investors: Individuals with high net worth from investments rather than monthly income.
• Entrepreneurs and Business Owners: Those with fluctuating or minimal taxable income.

With this program, your wealth works in your favor, allowing you to secure financing that standard loans may not provide.

How Asset Depletion Programs Work for Mortgage Qualification

Asset depletion programs operate distinctly compared to standard loans. Below is an outline of the usual steps and factors to consider:

1. Assess Your Total Assets: Lenders typically examine liquid assets and apply a percentage to offset market risks (e.g., 70% of your stock investments).
2. Deduct Closing Costs: Any costs associated with closing will be subtracted.
3. Calculate Monthly Income: The adjusted assets are divided by 360 months to determine your monthly qualifying income.

The amount required for a down payment can differ depending on the loan amount and your financial situation, but it typically falls between 10% and 30%.

Portfolio Loans Are Non-Conforming Mortgage Loans

Portfolio loans are typically non-conforming, meaning they don’t meet the standard guidelines for loans that can be sold to Fannie Mae, Freddie Mac, or other investors in the secondary mortgage market. Portfolio lenders may offer unique mortgage products tailored to specific borrower needs, such as jumbo loans, investment property loans, or loans for self-employed individuals.

When a lender keeps a loan in their portfolio, they also retain the servicing rights, allowing them to manage the loan from origination through payoff.

The main advantages of portfolio loans include more flexible underwriting, the ability to retain customer relationships, and the potential for higher profit margins for lenders. However, portfolio lenders also take on the full credit risk of the loans they originate. Portfolio lending allows banks, credit unions, and other financial institutions to customize their mortgage offerings and cater to borrowers who may not fit the standard conforming loan mold. This can expand home ownership opportunities for some consumers.

Portfolio Loans Are Also Called Non-Conforming 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, buyers 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. Any unique or odd residential properties will have a hard time getting comparable to an appraisal.  Each portfolio lender has its own lending requirements.

Portfolio Loan Guidelines are Different

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.

Most non-QM loans are portfolio loans where the lender keeps the loan in their portfolio after it funds. There is no waiting period after bankruptcy, foreclosure, short sale with NON-QM Loans on day out of bankruptcy or foreclosure.

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. Homebuyers who do not qualify for government or conventional loans and need to get qualified for a portfolio loan can contact us at 800-900-8569 or text for a faster response. Or email us at gcho@gustancho.com.

Post Coronavirus Pandemic Update on Portfolio Loan Programs

Gustan Cho Associates Mortgage Group suspended all non-QM loans, especially the bank statement loan program for self-employed borrowers, due to the coronavirus pandemic. However, the great news is that we have reopened the bank statement mortgage loan program for self-employed borrowers. The new update on the bank statement mortgage loan program for self-employed borrowers is borrowers will need to provide 24 months of bank statements. The 12-month bank statement loan program is still suspended. We do expect the 12-month bank statement loan program will reopen in the coming months. Gustan Cho Associates will keep our viewers updated when the 12-month bank statement loan program for self-employed borrowers reopens.

Investor Portfolio Loan Programs

If you’re an investor, portfolio loans can give you access to high LTV (loan-to-value) ratios and more flexible income sources. At Gustan Cho Associates, our investor portfolio loan program allows you to finance 10 properties and hold up to 15 total real estate-owned (REO) properties. Here’s how it breaks down:

• 100% Asset Use: No reduction for stocks or bonds, meaning you get maximum value from your assets.
• Up to 75% LTV: Cash-out refinancing options are available with no rate adjustments.
• Multiple Income Sources: Asset depletion can be combined with other sources, such as W-2s, rental income, or retirement income.

This portfolio loan program is designed to support investors who need access to financing without rigid income documentation or investment restrictions.

Qualifying Properties and Eligible Asset Types

Portfolio loans can be applied to a wide range of properties:

• Owner-occupied residences
• Second homes
• Investment properties
• Condotels, non-warrantable condos, and co-ops

Eligible asset types typically include:

• Cash in U.S. bank accounts
• Stocks, bonds, and other marketable securities
• Retirement funds (age requirements apply)

Funds held in private investments or trusts generally cannot be used unless unrestricted.

Conconforming Portfolio Loans on Co-Ops, Condos, and More

One standout feature of portfolio loan programs is that they allow financing on property types generally ineligible for conventional loans. This includes:

• Condotels and Non-Warrantable Condos: Up to 75% LTV for second homes.
• Co-Ops: Typically require only a single appraisal, saving time and expense.
• Investment Properties: Up to 60% LTV, even on cash-out refinances.

The maximum debt to income ratio of the borrower cannot exceed 40% DTI. 80% LTV up to $1 million loan amount with reduced LTV’s up to $3 million. 30-year amortization term. No prepayment penalty on all portfolio loan programs. 2/2/6 caps, 1-year CMT Index, 3.0% Margin, Floor= Note Rate. Escrows required.

These options are ideal for borrowers interested in less conventional properties. Gustan Cho Associates can assist with the application process, even for unique property types that don’t meet agency guidelines.

How to Get Started with Portfolio Loan Programs

If you’re interested in exploring your options with a portfolio loan, here’s a simple guide to help you get started:

1. Connect with a Loan Officer: Schedule a meeting to explore your financial objectives and identify the portfolio loan option that suits your requirements best.
2. Evaluate Your Assets: Make a list of liquid assets, such as cash, stocks, or retirement funds, that you can use to qualify.
3. Review Property Requirements: Check which property types qualify, especially considering a condotel, non-warrantable condo, or investment property.
4. Choose Your Program: Asset depletion, no-income documentation, and foreign national loans offer unique benefits.

Portfolio loan programs require fewer traditional income documents but still involve a careful review of your assets and property type. By working with a lender who understands portfolio loans, you can streamline the process and get pre-approved faster.

Ready to Explore Portfolio Loan Programs?

Gustan Cho Associates is here to simplify the process. We recognize that borrowers with unconventional profiles have distinct needs, and we provide tailored solutions to help you reach your real estate goals.

Whether you’re buying, refinancing, or investing, our team of loan specialists at Gustan Cho Associates can guide you through each step.

Ready to start? Call us today or apply online to see how easy it can be to find a portfolio loan tailored to your needs. We’re excited to help you unlock the door to your next property with a portfolio loan that suits your financial picture.

Benefits of No Income Documentation Mortgages

Going with a no-income-doc mortgage can pay off well for the right buyer:

• ✔ You skip submitting tax returns.
• ✔ Lenders weigh other factors, like bank cash, monthly rent rolls, or profit-and-loss statements.
• ✔ You might snag a bigger loan than with other programs.
• ✔ It’s a hit with self-employed pros and property buyers who flip buildings.
• ✔ The rules are looser for property kinds—think short-term or mixed-use.

Types of Portfolio Loan Programs

Asset Depletion Mortgage Loans

What it is:

An asset depletion loan works by allowing you to qualify based on cash and investments rather than paycheck stubs. You move the amount you have stashed in accounts into income for the loan—breaking it down into a monthly hit—so you don’t need a steady paycheck to fit the standard debt-to-income ratio.

How it works:

The lender takes the borrower’s verified assets and splits them over a fixed period to create a monthly income. A common term used is 120 months (or 10 years).

Best for:

• Retirees sit on a healthy nest egg but receive little cash each month.
• High-net-worth borrowers without another visible income stream.

Example:

A client shows $1,200,000 in assets, which the lender treats as $10,000 in monthly qualifying income since $1,200,000 ÷ 120 months equals $10,000.

Debt Service Coverage Ratio (DSCR) Loans  

What it is:

A DSCR loan is for real estate investors. Approval hinges not on borrower income but on cash flow from the rental property itself.

Qualification standards:

• Most lenders want a minimum ratio of 1.0, ensuring the property’s income completely covers the mortgage.
• A few providers accept lower DSCRs if the borrower makes a bigger down payment.

Best for:

• Investors managing several rental units.
• Borrowers focus on financing, which is determined mostly by property cash flow.

Profit and Loss (P&L) Statement Loans  

What it is:  

A P&L statement loan streamlines the approval process for self-employed individuals. Instead of the usual tax returns, the borrower uses a P&L created in-house or prepared by a CPA to show income.

Advantages:

• You don’t need to show all your business or personal tax returns.
• It’s easier to gather paperwork for business owners who have complicated deductions.

Best for:

• Self-employed people.
• Owners of small businesses that write off a lot of expenses.

No-Doc Loans (True No Income Verification)

What it is:

• A no-doc loan means very little paperwork is needed.
• You might only need to confirm your name, credit history, and assets rather than proof of income.

Features:

• You’ll likely need a big down payment, usually between 20% and 30% or more.
• Interest rates might be slightly higher since the lender takes on more risk.
• Your credit score is still a key factor.

Best for:

• People who want to keep their financials private.
• Borrowers whose income is hard to show, like freelancers or gig workers.

Who Should Consider Portfolio Loan Programs?

Portfolio loans aren’t for everyone, but they work well for:

• Those who don’t meet standard loan guidelines.
• Real estate investors need fast, simple approvals.
• Clients with many assets but little documented income.
• Self-employed workers whose paychecks vary a lot from month to month.

Potential Downsides of No Income Documentation Mortgages

Though these loans give you more flexibility, keep these cons in mind:

• Interest rates are usually higher than those on standard mortgages.
• You’ll need a larger down payment than many traditional loans require.
• Your credit score must meet stricter benchmarks.
• Not as many lenders offer these loans compared to regular mortgages.

How to Qualify for a Portfolio Loan

To get your loan application ready for a portfolio lender:

• Keep your credit score healthy.
• Aim for at least 660.
• Collect your financial documents.
• This includes bank statements, rental agreements, or other proof of income.
• Prepare for a bigger down payment.
• Expect to put down 20–30% of the purchase price.
• Partner with a broker who knows no-doc or portfolio loan options well.

Why Work With Gustan Cho Associates

Gustan Cho Associates focuses on no-overlay mortgage lending, which means we give the green light on loans that other lenders commonly turn down. Our portfolio programs fit:

• Self-employed workers who don’t show high income on tax returns.
• Investors who want debt service coverage ratio (DSCR) financing.
• Retirees are relying on asset depletion calculations.
• Clients who really need a true no-doc mortgage.

We’re licensed in 48 states, delivering solutions coast to coast for borrowers with one-of-a-kind needs.

• Call us at 800-900-8569 or check out Gustan Cho Associates for your mortgage options.

FAQs About Portfolio Loan Programs

What’s The Minimum Credit Score For a Portfolio Loan?

• Most portfolio lenders look for a score of 620, but the best rates go to those with higher scores.

Are No-Doc Loans Available in 2025?

• Absolutely.
• They are uncommon, yet certain portfolio lenders offer them, especially to investors and borrowers with large asset reserves.

Can Foreign Nationals Qualify For Portfolio Loans?

• Absolutely.
• Several portfolio lenders have programs designed specifically for foreign nationals.

Are interest rates higher for loans with no income documentation?

• Usually, yes.
• The rates are often slightly elevated because lenders see more risk.

Can I Use Portfolio Loans For Primary Residences?

• Yes, you can.
• However, most borrowers use them for investment properties or second homes.

A Customized Path to Homeownership and Investment  

• Portfolio loans—like asset depletion mortgages, DSCR loans, P&L statement loans, and no-doc mortgages—create real options for borrowers who don’t fit standard guidelines.
• Whether you are self-employed, an investor, or a retiree with significant assets, these programs can help you achieve homeownership and investment.

At Gustan Cho Associates, we know that no two financial stories are the same. Our team is skilled at matching borrowers with the right portfolio loan—even when other lenders say no.

Reach out now at 800-900-8569 to explore our no-income documentation mortgage options.

Frequently Asked Questions About Portfolio Loan Programs:

Q: Do Portfolio Loans Require a Credit Check?

• Yes, but the focus is more on your assets than your credit score.
• Portfolio loans provide flexibility in credit requirements, especially if you have strong assets.

Q: Can I Refinance With a Portfolio Loan?

• Yes, portfolio loans can be used to refinance properties, including high-value investment properties or unique residential units.

Q: What Are The Interest Rates on Portfolio Loans?

• Interest rates differ based on the lender, the amount of the loan, and the asset characteristics.
• Given that portfolio loans pose a greater risk to lenders, their rates may be somewhat elevated compared to conventional loans.

Q: How Long Does it Take to Close a Portfolio Loan?

• Portfolio loans can close within a few weeks.
• Gustan Cho Associates offers rush closings in as little as two weeks for eligible borrowers.

Q: Are Portfolio Loans Eligible for All Property Types?

• Portfolio loans are available for various properties, including condotels, co-ops, non-warrantable condos, and multi-family units.

Q: Can I Use a Portfolio Loan For a Vacation Home?

• Absolutely!
• Portfolio loans are flexible and often ideal for second homes or vacation properties, including unique property types like condotels or properties in resort areas.

Q: Are Portfolio Loans Available For Foreign Nationals?

• Yes, portfolio loans can be tailored for foreign nationals looking to purchase or invest in U.S. properties.
• These loans often have fewer restrictions on U.S. credit history and allow foreign assets to be used for reserves.

Q: What Types of Assets are Eligible For Asset Depletion Calculations?

• Portfolio loans typically consider cash, stocks, bonds, mutual funds, and retirement accounts (for borrowers over 59½).
• Private investments, like hedge funds, may not qualify unless fully accessible.

Q: Is There a Prepayment Penalty With Portfolio Loans?

• Gustan Cho Associates offers a variety of portfolio loan options that do not include a prepayment penalty, allowing borrowers to settle their mortgage early without facing extra fees.

Q: Can I Qualify for a Portfolio Loan After a Recent Bankruptcy?

• Yes, portfolio loans often provide options for borrowers coming out of bankruptcy.
• With a larger down payment, some portfolio loan programs allow qualification as soon as one day after a bankruptcy or foreclosure.

This blog about “Portfolio Loan Programs: No Income Documentation Mortgages” was updated on September 16, 2025.