Stated income loans

There are two common types of Stated Income Programs:
Stated Income Verified Assets Loan: (SIVA) - Loan approval is based on your stated income, credit history, and verified liquid assets (bank accounts, 401k, stocks, bonds, etc.). The Verified Assets should be consistent with the income claimed.

Stated Income Stated Assets Loan (SISA) - No assets are verified with this loan. You only state your income and state your assets on the application. This program may have a slightly higher interest rate because the assets are not verified.

Generally a no income, no asset (NINA) loan requires no verification of income or assets. However verification of employment is required and 2 years of same line of work is required. A No Doc loan is a NINA without verification of employment.

As you move down the line on the different programs, from SIVA to SISA to NINA the interest rate will move a bit higher each time. Depending on your credit scores and LTV (loan to value) you might be able to qualify for one but not another.

Stated income loans normally require a slightly higher credit score to qualify for the same loan to value as compared to a full documentation loan or bank statement program.

Stated income is a very popular form of qualifying. As you're probably aware, most successful business owners write off many of their expenses at the end of the year on their taxe. This causes the borrower to have very little net income to be used for loan qualification. You also see this with borrowers that make tips, bonuses and commission as their sole form of income.

Stated income loans are also used when a borrower cannot provide income documentation such as paystubs and tax return information. In a stated income loan, the client "states" the amount of income that they make and the position and for how long they have worked. Lenders usually require the borrower be employed for a minimum of 2 years for stated income loans. Also, when you state the income, it must be typical for that job title. You can't have cashier making $18,000 a month. The stated income must be believable.

Under stated income programs your income will not be verified but your employment will. No employment verification programs are typically called No Documentation or NINA (No Income, No Asset).