The State of Stated Income Commercial Loans
While stated income loans have received a bad reputation after the 2008 financial, stated income commercial loans played a lesser role in the carnage associated with the housing market crash. Today, government legislation and regulation has made it tougher for individuals to acquire commercial mortgage loans. While investors and individuals alike have looked for alternatives when shopping around for mortgage loans, hard oney loans and stated income loans continue to be a viable alternative.
Today, there are a wealth of commercial properties that fall within the scope of stated income commercial loans. These include:
- 1 to 4 family properties up to $1 million
- Multifamily (5 or more units) up to $5 million
- Mixed Use to $5 million
- Warehouse to $5 million
- Retail to $5 million
- Office to $5 million
- Self Storage to $2 million
- Auto Repair/Auto Service (no gas stations) to $5 million
- Condos to $1 million (including high rise)
- Commercial Condos and Office Condos to $1 million
Many borrowers have turned to stated income commercial loans relative to hard money loans due to lower interest rates. Lenders are more concerned with four elements when it comes to stated income commercial loans; equity, appraisal, market rents, credit. Because less emphasis is put onto reported income of borrowers, lenders look for significant equity as a metric for lending. Also, lenders require a relatively strong credit score (at least 700) when considering a stated income loan.