Finding the Best No Tax Return Mortgage Loans 

If you’ve been looking for great alternatives to hard money then you’ve come to the right place. Because Valor Lending Group has long term financing solutions for non-owner occupied investment 1-4 unit rental properties. No tax returns required. Qualify based on the income of the subject property.

Borrowers that fall outside traditional underwriting guidelines but are looking for long term loans with more attractive rates than hard money loans can use the no tax return investment property loan to their advantage. These loans do not require tax returns, income or employment, or debt to income ratio calculations.

What Are No Tax Return Mortgage Loans? 

Sometimes called “investment property loans” or “rental loans,” no tax return mortgage loans do not consider a borrower’s income in the traditional sense. Instead, the qualifying income for the loan is the cash flow of the property.

To be specific, the “cash flow” is just the monthly rental amount the property brings in. For example, a property renting for $2,000/month would be attributed a qualifying income of $2,000/month. The main requirement for these investment property loans is that the monthly rents sufficiently cover the monthly expenses. It is that simple.

Why Use No Tax Return Mortgage Loans? 

Traditional mortgage lenders require tax returns, W-2s, and paycheck stubs in order to determine monthly income. Lenders look at gross income to qualify salaried or hourly borrowers. But for self employed borrowers, traditional mortgage lenders look at net income (the adjusted gross income showing on tax returns). This puts real estate investors and other self employed borrowers at an inherent disadvantage.

Therefore, not only is a borrower’s income not considered in the loan application process, investment property lenders do not request income amounts. In fact there is no income verification of any kind. No letters from employers, no W2s, and no pay stubs. Again, the income use to qualify for the loan is simply the cash flow of the rental property.

How Do I Qualify For A No Tax Return Mortgage Loan?

The debt service is the most important factor when considering the no tax return mortgage loan.  The property has to cover its own monthly principal, interest, taxes and insurance (HOA as well if there is one) obligation.  As an easy example, if the PITI is $1,000/mo. the monthly rental income must be a minimum of $1,100.

• Typically require a minimum 680 credit score
• Cash/liquid reserves are typically required in the amount of 6-12 months PITIA payments (principal, interest, taxes, insurance, and HOA dues if any)
• The subject non-owner occupied investment property must debt service (DSCR) above 1.1 to 1
• Appraisals are typically required
• Maximum LTV 80%

Pros & Cons of No Tax Return Mortgage Loans

1) Pros 

• No tax returns required
• No employment or income required
• Personal or business income not considered
• No debt to income (DTI) ratio developed or considered
• Allows real estate investors and self employed individuals to qualify when they otherwise cannot

2) Cons

• • Larger down payment than traditional loans
  • Rates are slightly higher than traditional loans (but not much more)
  • Some (but not all) lenders require landlord experience
  • Personal credit still plays a role

Conclusion

No tax return mortgage loans provide the flexibility and lessened documentation of hard money loans, but with rates closer to traditional financing. However, rental loans are a great way for real estate investors to qualify for both acquisitions and refinances, without requiring tax returns, and without having to qualify using a debt to income ratio. (Bank statement loans are also a great option for self employed borrowers, to learn more about bank statement loans click here.)

This is an evolving area of real estate financing that offers a powerful way to grow your real estate portfolio. If you would like to discuss your no tax return investment property loan options, please give us a call today.

Recap of our Loan Products:

1. Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
2. Stated Income Loans (Great for business owners and self employed ) No tax returns!
3. 100% financing is available (we can cross collateralize other properties if there is enough equity)
4. Valor VA Home Loan 100% financing up to $1.5MM
5. Rental Property Loan – No tax returns or DTI calculation! Based on subject property cash flow – No DSCR Coverage needed!
6. Flipper & Rehab Loans (Flip a property with one of our many options)
7. 2nd Position Loans up to $5mm
8. Raw Land & Lot Loans
9. Ground up Construction for spec homes, custom homes and commercial ground up.
10. Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
11. 5% down Jumbo’s with NO MI up to $2mm / 10% down up to $3mm
12. Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
13. Acreage Properties
14. Commercial Loans up to $500mm
15. 3% & 5% down Conventional Loans– LPMI (Lender paid mortgage insurance)
16. Foreign Nationals Loans (no social security or residency required)

We also offer:

1. Conventional Conforming Loans (under $510,400)
2. High Balance Conforming (from $510,400-$765,600)
3. Jumbo Loan Financing to $10 Million / Super low rates! / 10% down Jumbo to $3mm
4. FHA, USDA
5. Reverse mortgages up to $1 Million Value
6. Cash Out Refinancing

**Rates and terms subject to change without notice

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Please give me a call if you have any questions and we look forward to the opportunity to serve you!

Valor Lending Group also offers literally every loan in the book! Please do not hesitate to call on me for any scenarios.  I look forward to an opportunity to demonstrate my prompt and professional service.