SELF-EMPLOYED, 1099 EMPLOYEE? GREAT NEW LOAN PROGRAM
There is a great new loan program for buyers that are self-employed and/or 1099 employees! Below is some general information regarding this loan program. Should you have any further questions please feel free to contact us. We would love to assist you with your real estate needs!
Borrower Employment Types:
o Must provide business license, Tax Preparer’s letter or corporate paperwork.
Personal or Business Bank Statements can be accepted. However, qualifying income will be calculated differently.
Personal Bank Statements: 100% of Deposits
Add all deposits for all 12 or 24 months and divide that amount by 12 or 24 respectively to receive the monthly income amount we will apply as the borrower’s qualifying income.
Ex. 24 months deposits total = $200,000 / 24 = $8,333 a month income.
Ex. 12 months deposits total = $100,000 / 12 = $8,333 a month income.
Business Bank Statements: 50% of Deposits
Add all deposits for all 12 or 24 months, divide by 2, and then divide by 12 or 24 respectively to receive the monthly income amount we will allow for the borrower.
Ex. 24 month deposit total = $500,000 / 2 = $250,000 / 24 = $10,333 per month income. Only 50% is used because we have to assume the business has overhead.
Details of Loan Program:
Personal & Business Guidelines
- Only deposits can be used
- Transfers are NOT counted on personal and case-by-case for business*
- Must have 12 or 24 consecutive months of statements (no gaps)
- Must provide All pages (even the last pages with advertising)
- Cannot comingle (use two different accounts) statements**
- If account was used and closed and new account for remainder of statements must show closing of old account and opening of new account
* Transfers may be accepted for business statements when they come from credit card clearing houses (examples: Paypal, Square, AMEX, etcetera). Reviewed for acceptance of loan on a case-by-case basis, and must be considered normal for the company.
** Multiple accounts are considered for loan on a case-by-case basis when (a) one account is closing and reopening new account, or (b) for Business accounts that are two different and autonomous businesses.
Again, feel free to contact The Villarreal Team for further information on this program and/or for all your real estate needs.
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