There are may programs for investors available nowadays and they are called non-qualified loans. The loans area not only for borrowers with bad credit. There are many qualified borrowers with strong credit profiles and high credit scores than can benefit from Non-QM loans. Two most popular lending program are: 12-month bank statement, asset depletion program and FHA loan. Let’s talk about the asset depletion program first. 

Asset Depletion Program for Investors

Asset depletion is a program in mortgage that allows individuals to qualify for a loan based on the value of their liquid assets, rather than their income. This can be beneficial for those who have a high net worth, but low income, such as retirees or those who are self-employed. 

There are two main types of asset depletion programs: those that use a fixed formula, and those that use a variable formula. 

Under a fixed formula asset depletion program, the borrower’s monthly mortgage payment is calculated by taking a percentage of the total value of their liquid assets. For example, if the borrower has $1 million in liquid assets and the percentage used is 3%, the monthly payment would be $30,000.  

Under a variable formula asset depletion program, the borrower’s monthly mortgage payment is calculated by taking a percentage of the value of their liquid assets minus any other debts and obligations they have. For example, if the borrower has $1 million in liquid assets and $200,000 in other debts and obligations, the monthly payment would be $24,000 (3% of $1 million minus $200,000). 

Asset Depletion for Low Income Borrowers

Asset depletion can be a useful tool for those who have a high net worth but low income. It can help them qualify for a loan that they might not otherwise be able to afford. However, it is important to remember that asset depletion programs can also be risky. If the value of the borrower’s assets decreases, they may find themselves unable to make their monthly payments. 

There are two main types of asset depletion programs: those that use a fixed formula, and those that use a variable formula. 

Under a fixed formula asset depletion program, the borrower’s monthly mortgage payment is calculated by taking a percentage of the total value of their liquid assets. For example, if the borrower has 1 million in liquid assets and the percentage used is 3%, the monthly payment would be $30,000. 

Under a variable formula asset depletion program, the borrower’s monthly mortgage payment is calculated by taking a percentage of the value of their liquid assets minus any other debts and obligations they have. For example, if the borrower has $1 million in liquid assets and $200,000 in other debts and obligations, the monthly payment would be $24,000 (3% of $1 million minus $200,000). 

Asset depletion can be a useful tool for those who have a high net worth but low income. It can help them qualify for a loan that they might not otherwise be able to afford. However, it is important to remember that asset depletion programs can also be risky. If the value of the borrower’s assets decreases, they may find themselves unable to make their monthly payments. 

When considering an asset depletion program, it is important to speak with a qualified financial advisor to ensure that it is the right decision for your individual circumstances.

12-Month Bank Statement Program for Self-employed Borrowers

When you’re self-employed, it’s not always easy to prove your income to potential lenders. Bank statement loans are a great option for self-employed borrowers because they allow you to use your bank statements to show your income. This type of loan is available from a variety of lenders, including online lenders and banks.

There are a few things you’ll want to keep in mind when applying for a bank statement loan. First, make sure you have a good credit score. The lender will check your credit score to make sure you’re a good risk for a loan. Second, be prepared to provide your bank statements for the past few months. The lender will use these statements to verify your income. Finally, be sure you can afford the monthly payments on the loan. Bank statement loans typically have higher interest rates than traditional loans, so you’ll want to make sure you can budget for the payments.

If you’re self-employed and looking for a loan, consider a bank statement loan. This type of loan can be a great option for borrowers who may have trouble proving their income. Be sure to shop around for the best rates and terms from a variety of lenders before applying.

FHA Loan for Multi-Family Units 

If you’re an investor considering an FHA loan, there are a few things you should know.  FHA loans are a popular financing option for investors because they offer low down payments and flexible credit requirements. With 3.5% down payment and 580 credit score you can get a 4-unit building in Cincinnati & Northern Kentucky in counties like Hamilton for up to 809,150 FHA loan limit. 

FHA Loan for First Time Investors

There are several benefits for first time home investors to buy a multi-unit with an FHA Loan. If you’re considering using an FHA loan to buy a multi-unit, there are a few things to keep in mind. First, make sure the property you’re interested in meets FHA requirements. The property must be owner-occupied, meaning you must live in one of the units, and it must have at least four units overall. It’s also important to note that FHA loans come with mortgage insurance premiums, which can add significantly to your monthly payments. In most cases if your numbers make sense, you will be living in 1^st unit rent-free and cash flowing on other 3 units. This can be a great start for first time investors and can be easier to get 2^nd investment property with conventional loan where you need to put at least 10% down and have better credit. 

If you’re comfortable with the added costs and meet all the requirements, using an FHA loan to finance your house hack can be a great way to get started in real estate investing. Here are three more tips for house hacking with an FHA loan:

1. Look for properties with low- or no-money-down financing options.

There are a number of financing programs available that can help you get into a property with little or no money down. This can be especially helpful if you’re trying to house hack on a tight budget.

2. Get pre-approved for your loan before you start shopping for properties. 

This will give you a better idea of how much you can afford to spend, and it will make the entire process go more smoothly.

3. Work with an experienced real estate agent who is familiar with multi-unit and know the area. 

If you need a realtor, I will be able to help you find the right property and navigate the process from start to finish.

If you’re investor you have variety options on the market right now, form assets depletion program to 12 banks statement programs to even FHA programs which can be used by first time home buyers. If you just be sure to do your research and work with an experienced real estate professional to make sure it’s the right fit for you.

Peter Beeda is licensed realtor and helps investors in Chicago to find short sales in a good price, with his 6 years’ experience in residential lending he is a right person to chose when you want to find an investment property in Chicago area. 

This article was provided for Greater Cincinnati Area Luxury Realtor Paul Sian of United Real Estate Home Connections. Paul is a licensed real estate agent in the states of Ohio and Kentucky and has over 14 years of experience. Do you have a home you are ready to sell now in Greater Cincinnati or Northern Kentucky? Be sure to contact me now!