Stated income HELOC?

Question

We'd like to get a HELOC to be able to have money to put down with a HML in order to be able to purchase a property to fix and flip.

We have about $150k in equity in our personal home.  We have credit scores in the mid-700's and low debt.  However, we are both self-employed and take all possible deductions so income does not show to be very high.

Does anyone do stated income, no doc or low doc HELOC's?

Jake Langley · Answer

Thanks for your fatherly advice, but I did not Lie to the IRS, and I did accurately report my income taking full advantage of my allowable deductions.  If you would like to add a constructive recommendation on how I can get a loan, thats fine , otherwise your keep your condescending tone to yourself.  I am fully aware of the tax laws for real estate professionals!!!

Chris Kline · Answer

@Ron dude im sorry but you're just flat wrong Sir.  There are many legit ways you can have stable, consistent, positive monthly cashflow and have a year end tax loss. Section 179 expense, capital loss carry forward, or passive deductions on Schedule E, to name a few. In a simple *conceputal only* example, say your s-corp consistently generates 100k a year, and you decide it will invest in an oil and gas rig. Lets say the IRS allowed you to take 200k of that investment (which is spent on new equipment/construction) as a loss (rather than depreciate it)- then your return this year would show -100k in income, and your return next year would show $0 in income, even though you actually made 200k in income during that period!!! Do not confuse actual income with taxable income.

By the same concept, my business could make 100k this year, but sell securities it has held  long term and take a -100k loss, resulting in zero taxable income. I decide when to sell those securities. If i want to get loan approval, then i could sell the day after the loan is underwritten so i can show 100k of income. In this respect, i can easily "manipulate" my tax returns while doing absolutely nothing wrong or illegal. In short, the banks are dumb dude. Your average underwriter doesnt know how to read a form 1120S. They'll probably ask for K1s, but understanding the K1s is another story...

Melvin List · Answer

@Ana Huffer I stated HELOC will be very tough to find but you may be able to do a new first with bank statements.

Rick Taldykin · Answer

That's not necessarily hard money, @Sam Shueh. It's more like "soft" money.

However, lots of "stated income" lenders portray themselves as that, but when the time comes to collect docs, they request bank statements with two years seasoning. That's not true stated income. It's important to look out for bait and switch tactics in the beginning, so they don't hit you with it at the end.

I see scenarios like this all the time from investors who looked for a stated income product, only to be hit with request for bank statements at some point. While it's understandable that these programs are niche and not for everybody, it's important to know that there is a definite need for them.

Jake Langley · Answer

I have had enough of your Shit RON- go somewhere else and Troll !!!

Greg San Martin · Answer

Here is a helpful article about the state of stated income loans in 2019:

https://mymortgageinsider.com/stated-income-loans-make-a-comeback-7284/

I know someone with a HELOC for $650,000.  He says he got that loan about 3 years ago based solely on equity.

Greg San Martin · Answer

I am surprised there is not a more robust discussion on this topic.  Had I not had access to stated income loans back in the day, I would not now have millions in equity.  In fact, I might still be renting.

I found one lender that may do stated income HELOCS. I have not called to confirm.  Has anyone heard of or done business with this company: nshomefunding?

https://www.nshomefunding.com/products/stated-income-loan/

Their terms do not make clear whether their advertised stated income loan is available as a HELOC or just as a 'lump sum on day 1' loan:

• Approved property Types: Residential properties such as; Investment Condos, SFR, 2-4 Unit.
• Commercial properties such as; Multi-family, Mixed-Use, Retail, Office, Warehouse, self-storage, & Auto Repair
• Self-Employed or Salaried Borrowers.
• Up to 70% Loan-To-Value.
• Minimum Fico Score is 650.
• 3 & 8 Year Fixed Rate ARM programs available each with principle & interest payments amortizing over 30 years. No Balloon Payments!
• No Tax Returns, No W2s & No Pay Stubs needed.
• Asset Verification IS required for Purchases, but NOT for Refinances
• Can close in the name of an LLC or Corp.
• Loan amounts ranging from $100,000-$3,000,000. (Exceptions made for higher loan amounts on a case by case basis)
• Conditional Loan Approvals issued within 24 hours

Jake Langley · Answer

Im having the same problem, trying to get a HELOC on my owner occupied property. I only want 50K with 150k equity .  Im 1099 and have rental income of 3k/month but every bank wants a W2 income or tax returns that show a large net profit.  Im trying a bunch of credit unions but so far nothing.

Ron S. · Answer

So, if you didn't lie to the IRS, then, what you reported to them is exactly what your income is. Just accept it and get over yourself. I love how hurt people get when they don't like what they hear. You heard what you needed to hear if not what you wanted to hear. Constructively speaking, quit taking full advantage of all of the deductions allowable or, claim enough income to qualify. You can't have it both ways. Maybe you should grab a blanky and seek a safe zone if that's too harsh of the truth?

Ron S. · Answer

Start accurately reporting your income on your taxes and your situation might change? No bank wants a tax return that shows a large net profit. They want a tax return that shows an accurate reflection of your income so, if your tax return shows a small net profit or, a profit too small to qualify for a loan, that's either your actual income or, you lied to the IRS.

Stated income HELOC?

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