> ## Content Index > Fetch the complete content index at: https://www.mortgagemomradio.com/llms.txt > Use this file to discover other available public pages before exploring further. # Can You Get a Mortgage Without Tax Returns? Four Alternative Loan Programs - URL: https://www.mortgagemomradio.com/can-you-get-a-mortgage-without-tax-returns-four-alternative-loan-programs/ - Published: 2023-05-17T21:00:00.000Z - Updated: 2026-09-04T17:36:40.000Z - Description: Fannie, Freddie, FHA and VA all start by asking you to prove your income. Debbie walks through four that don't: the Community Mortgage, bank statement loans, debt service ratio loans where the rental qualifies instead of you, and hard money — with the scores, down payments and reserves each takes. - Author: Deborah Marcoux - Tags: Podcast, Mortgage Mom Radio, #episode-backfill Mortgage Mom Radio • “Alternative Loan Options!” • Live show from Wednesday, May 17, 2023 • 58 minutes • Hosted by Debbie Marcoux, NMLS #237926 Fannie Mae, Freddie Mac, FHA and VA all start from the same place: prove your income. This episode is about the four programs that don't. Debbie walks through the Community Mortgage — a true no-income-qualifying loan for a primary residence or second home — bank statement loans for the self-employed, debt service ratio loans where the rental property qualifies instead of you, and hard money. What each one costs, what it takes to get one, and when it's the right tool. ## Key takeaways - **The Community Mortgage is a no-income-qualifying loan** for a primary residence or second home. No W-2s, no pay stubs, no tax returns — and unlike old-school stated income, no employer and no income figure go on the application at all. Confirmed on air: **640 credit score, 20% down, 12 months of reserves.** You don't have to be self-employed. - **Bank statement loans are self-employed only** and qualify you on 12 or 24 months of business bank deposits. Twenty-four months prices better than twelve. Confirmed on air: **20% down at a 700+ score, 25% down at 660–699** (for investment property, 25% down at 740 and 30% at 680–699). Returned inventory and supply purchases are excluded from the deposit math. - **Debt service ratio (DSCR) loans let the property qualify itself** on investment purchases — no income verified from you at all. The rent, set by the appraiser or by an existing lease, has to cover the full payment. **700 credit score, 25% down minimum, 12 months of reserves**, and you generally need to already own a primary residence. - **These carry higher rates because they are non-qualified mortgages.** At the time: the Community Mortgage and DSCR around **8%**, bank statement in the **high sevens** with 20% down and a 680–700 score, and hard money at **11–12%**. For context, a fully documented conventional investment loan was already in the high sevens. - **Hard money is short-term financing with a job to do:** a property that can't be financed — broken windows, no toilets, a build the builder never finished — or a close in about seven days to beat nine other offers. Typically a 12-month term and 25–30% down. Buy it, fix it, then refinance into permanent financing. - **All four work for refinances, not just purchases** — paying off debt, funding home improvements, or pulling equity out when you started a business and your returns don't show it yet. - **On the loan-pricing headlines:** nothing made low credit scores qualify more easily. Everyone still has to qualify. The Fannie Mae and Freddie Mac pricing adjusters were announced at the start of the year and had been in lenders' pricing models since February. High-score borrowers with large down payments actually improved in several places, especially on investment property; borrowers in the 680–699 range saw a slightly worse adjustment. ## Chapters - 06:00What we're covering: DSCR, Community Mortgage, bank statement - 07:00Community Mortgage: no income, no employer, no tax returns - 08:00Why non-QM loans price higher — and the refinance exit - 12:00Confirmed live: 640 score, 20% down - 13:00Reserves explained, and why 12 months - 19:00Bank statement loans: 12 months vs. 24 months - 21:00Down payment tiers and why 20% beats 10% - 29:00Down payment by credit score, confirmed on air - 31:00Debt service ratio loans: the property qualifies, not you - 33:0025% down, 700 score, and the rent-to-payment ratio - 37:00The three programs side by side - 44:00Q&A: do low credit scores now qualify more easily? - 48:00Hard money: fixer-uppers, flips, and seven-day closings - 51:00What hard money costs and what it requires - 55:00Wrap-up and how to catch the next live show ## Questions answered on this show ### “Do the new loan pricing rules mean people with lower credit scores qualify more easily — and does that hurt buyers with great credit?” No. Nothing about it changed who qualifies — everyone still has to qualify for the mortgage they're applying for. What actually changed were pricing *adjusters*: the same category of adjustment that already moves your rate based on credit score, down payment, property type and debt ratio. Higher-score borrowers with larger down payments picked up an additional adjustment of roughly 0.125%, and a small offsetting adjuster was added for lower-down-payment, lower-score borrowers. The real-world impact was minimal in both directions. It wasn't new, either: it was announced at the beginning of the year and had been in lenders' pricing models since February. Comparing before and after, several pockets actually *improved* for high-score borrowers with big down payments — investment property pricing improved significantly — while the 680–699 range saw a slightly worse adjustment. It had been in effect for months before a news article made it a story. ### Find out which of these programs fits your situation Call [844-935-3634](tel:8449353634) (844-WE-LEND-4), [start an application](https://www.mortgagemomradio.com/apply/), or run your numbers with the [mortgage calculators](https://www.mortgagemomradio.com/tools/). Get the weekly rundown in the [newsletter](https://www.mortgagemomradio.com/newsletter/). Full transcript (lightly edited for clarity) *Auto-generated captions cleaned for readability. Commercial breaks, licensing recitations, and repeated housekeeping have been trimmed; licensing information appears at the bottom of this page.* ### Today's topic: alternative financing Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, I'm the Mortgage Mom. Most weeks we talk about VA, FHA, conventional, Fannie Mae, Freddie Mac, jumbo — the conventional options where you have to qualify to buy the property. Today we're talking about the alternative options we have available, because many times our clients don't know those options are there. They feel like they aren't able to buy, or that a refinance isn't possible. Every now and then it's important to remind you of all the different options we have. We're going to talk about DSCRs — many of you don't know what that means. We're going to talk about our Community Mortgage program, which is a stated income program for a primary residence. We're going to talk about bank statement programs for self-employed borrowers. And if we have time, hard money. ### The Community Mortgage: a true no-income-qualifying loan Community Mortgage is a primary residence loan and it's stated income. We are not going to verify where you work. We are not going to ask for W-2s. We are not getting pay stubs. We are not getting tax returns. This is a really great program for somebody thinking about moving out of state or relocating who hasn't found the job yet, so we have no way to verify where they'll be working. They don't want to rent first — they want to get there, get settled, then get the job. And then we can always look at refinancing into a better rate and payment later. Remember that these alternative loans are not qualified mortgages — they're called non-qualified mortgages. Because of that they carry a higher risk, which means a higher rate. Think about hard money loans: those are going to be super high, in the 10%, 11%, even 12% range. These are better than that, but you're probably somewhere in the 8% range, depending on how much you put down, your credit score, and the property type — single family, condo, or two-to-four unit. So you might think, my goodness, that's high. But we can always refinance once you're in a position to show the income needed to qualify. We don't necessarily need a two-year history at your job for that later refinance. If you're working in California and you decide to move to Tennessee — you're with the union, you have your card, you're a pipefitter or an ironworker — you get there, get settled, go down to the local union and get on a job. At that point, because you've been in the same job and the same industry for two years, we have the employment history we can look at. This is also a great program if you're self-employed and writing off all your income and you really want to be a homeowner. We don't have to prove income in any way. It's for a primary residence *and* second homes — so if you wanted to buy a vacation property, this works for that too. It is not going to work for an investment property, but we have other alternative options for those. I want to make sure you heard me: this is not a low down payment loan. This is not a 3% or 5% type of loan. If that's what you need, we're going back to Fannie and Freddie and FHA, those conventional and government programs where you do have to complete full qualifications. But if you have a decent down payment and a decent credit score, this could work — and if you thought you couldn't get financing, maybe you can. One important distinction: Community Mortgage does not require that you're self-employed. You aren't going to say what you do on the application at all. You could be a W-2 employee with a job — that doesn't matter. We are not limiting this to self-employed borrowers. *\[Confirmed live on air by Debbie's team during the show: the Community Mortgage requires a *640 credit score, 20% down, and 12 months of reserves*.\]* Reserves are the full amount of your mortgage payment — principal, interest, taxes and insurance — multiplied by the number of months required. Say your total payment is $3,000; twelve months of reserves means $36,000 we have to verify. You need your down payment, your closing costs, and then enough in the bank for us to verify reserves after closing. You are not required to *keep* those reserves after we close — they need to be in an account at the time of closing, and if you close and need to use those funds the next day, that's absolutely allowed. Every program and every lender has a slightly different reserve requirement. ### Bank statement loans for the self-employed Bank statement loans are for self-employed borrowers only. If you're a W-2 employee getting a salary or an hourly wage with pay stubs, this isn't a program you'd qualify for. We look at your last 12 to 24 months of business bank statements to see how much you've actually done in deposits. If you purchase inventory or tools or supplies for a job and then return those items, that money coming back in is excluded — but actual income from earnings is what we calculate on. We have two versions: the 12-month program carries a slightly higher rate than the 24-month, because the longer the history, the more we can confirm the income has been secure and stable. But maybe one year was bad and the next was great, in which case the 12-month version is better for you. Bank statement will price slightly better than the Community Mortgage, because it isn't purely stated. We're verifying that you own your business, we're seeing the statements, we're verifying the income that came in, and we're qualifying on those deposits — not on whatever you say you make. On down payment: it can go as low as 10% on a bank statement program, but hear the *however*. When you put a low amount down on these, the rate starts to get pretty high. If you're considering it, I'd recommend having at least 20% down. Even six weeks ago when I last looked at the 10% down version, that rate was quite high. Guidelines on these change rapidly. *\[Confirmed live on air: *20% down with a 700 or higher credit score, 25% down at 660–699.* For an investment property, *25% down at 740 and 30% down at 680–699.* Reserves generally 12 months, depending on the scenario.\]* With 20% down and a 680 to 700 credit score, we could absolutely get you down into the seven percent ranges — seven and a half, seven and three quarters. The rate is higher, but it gets you into a home and gets you the financing you need. Maybe you just started your business and filed tax returns for the first time for 2022, so you need to get 2023 filed to have a two-year history. Then in 2024 we do a refinance into better terms. And keep in mind these can be used for refinances as well. If you bought your home and you're trying to get equity out but you're self-employed and don't show enough income to qualify — if the bank statements don't work, we move you to the Community Mortgage for a primary or second home; if they do, we use the bank statement product. Home improvements, paying off debt, that's all on the table. As I'm saying these numbers — 640, 660, 680 — these are not difficult credit scores to reach, which means more people have the opportunity to get financing than realize it. When people hear "stated income" or "alternative" or "non-qualified mortgage," they usually assume they need a score in the 700s or 720s or 740s. That's not necessarily the case. ### Debt service ratio loans: the property qualifies, not you If you were a bank statement candidate buying an investment property, we probably wouldn't put you in a bank statement program — we'd look at a debt service ratio loan, a DSCR, because those rely on the property itself rather than on your income. The exception: if you don't already own a primary residence or an investment property, you generally can't do a DSCR. They want to see that you have housing expense somewhere and that you've been responsible with it. In that case we'd look at bank statement financing for the investment property instead. Here's how DSCR works. This is for investment only — you're buying the property to rent it out. The appraiser determines what the subject property could bring in per month. If it's already a rental with a current tenant staying in place, we use the actual rents. If it's somebody's home that you're converting to a rental, the appraiser sets market rent. Your monthly payment cannot exceed what the property brings in. The property needs to carry itself: if the full payment with taxes and insurance is $3,000 and the rent is $3,000, it qualifies. Rates are in the 8% range, like the Community Mortgage, but it's an investment property, the property is qualifying itself, you're not verifying income and you're not showing tax returns. You need a minimum **25% down** — all investment property loans require 25% and up, so depending on purchase price and loan balance you could need 30% or 35%. Minimum **12 months of reserves**, more as loan amounts rise. And a minimum **700 credit score**, which makes this the toughest of the three on score and down payment. There is a little wiggle room if the payment slightly exceeds rent, but as the gap widens they charge an interest rate premium that climbs and climbs. We want the rent covering 100% of the payment to get you the best financing. Do your due diligence — if it rents for $2,000 and the payment is $5,000, that's a two-to-one ratio and it simply will not qualify. Worth knowing: even a fully documented Fannie Mae conventional investment purchase requires 25% down, unless it's a single family one-unit property, where you could get in with 20%. So a DSCR asking for 25% is not a worse down payment than what you'd need anyway — with far less paperwork. And conventional investment rates were already up in the high sevens. There are many lenders doing these programs, which makes it a moving target. A lower credit score means a different lender, and that lender may want a different down payment or different reserves. But it's a great program, and many people don't even know it exists. ### The three programs side by side Community Mortgage: I keep saying stated income, but in reality it isn't even that. Back in 2003, 2004, 2005, everybody was doing stated income — we'd write down where you worked and then state a figure for what you made. This one doesn't record where you work, doesn't put it on the application, doesn't even put a number in the income field. It's truly a no-income-qualifying loan. Bank statement: self-employed borrowers only, and we *do* verify income — through the deposits into your bank statements. Debt service ratio: the property qualifies to carry itself, and no income is verified from you on the application at all. ### Hard money Those three programs land in the very high sevens to high eights. Hard money usually starts around 10%, and with rates having risen over the last year and a half we're seeing some come in at 11% and 12%. Definitely a more expensive product, but a different tool. Where does hard money make sense? A fixer-upper you can't get financing on. The roof is half falling apart. You're buying a property a builder started and didn't finish — and you're seeing a lot of that right now, brand new homes offered at a lower price if you'll finish the construction. Health and safety issues that make a home unfinanceable: broken windows, the kitchen pulled apart, no toilets in the bathrooms. A hard money loan gets you the money to buy it so you can fix it, then refinance into better financing or flip it. It's short-term financing. They typically write for 12 months and then want to be paid off. Hard money usually wants at least 20% down and it's usually closer to 30% — some lenders will do 25%. They're looking hard at the property and at the price you're paying, because they need to know they can get their money back on a short-term, high-interest loan. Hard money is also good if you want to take cash out of an investment property to go buy another one and you don't have time to put normal financing in place. These loans can close in about seven days. If there are ten offers on a property and you want to make yours more attractive, you can say you'll close in seven days — then afterward come back, do the loan application, get permanent financing, and pay off the hard money. There is a place and a time for it, and we have resources we can refer you to. ### Wrap-up If any of these programs sound like they're for you, head over to mortgagemomradio.com — don't forget the "radio." You can hit contact us, book an appointment for a phone call, send me an email, or call the office at 844-935-3634\. We'll talk about your specifics: what you're buying or refinancing, your goal, how much you have down, your credit score, whether it's a primary residence, a vacation property or an investment, and whether you're self-employed. Then we'll figure out the best program available for you, show you the numbers, show you the options, and let you decide. These are options for people who didn't think they had options, and that's exciting. They aren't for everybody — if you're a W-2 employee with a down payment who can prove your income and wants 3% or 5% down, you're a standard financing borrower and we love those programs too. But today's show was all about alternative financing. To join the show live, text the word MOM to 844-935-3634 and you'll get one link a week when I go live. I won't be back next Wednesday — I'm taking it off for the Memorial Day holiday week — but I'll be back the week after. In the meantime, call us and let's answer your questions. Talk to you all real soon. Bye-bye. Debbie Marcoux is licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, NMLS ID #237926, and additionally licensed in AZ (0941504), FL, GA, HI, ID, IL, NV, NC, OR, TN, TX, and WA. Rates and figures discussed were current as of the air date of May 17, 2023, reflect national conforming averages, and are not an offer of credit or a rate quote. Debbie Marcoux is not a financial advisor; consult qualified professionals about your individual situation.