Answers · Self-employed
Are no-doc, no-income and no-ratio loans real?
Yes, with limits. For a rental or other investment property, DSCR and no-ratio loans qualify on the property and your credit without looking at your personal income. For a home you will live in, a few lenders offer no-ratio loans too, and I have a couple of programs that do not look at income at all. They come with strict credit and down payment requirements and they cost more. For most people the better fit is low-doc: bank statements, a profit and loss statement, 1099s, or assets.
Written by Andrew Malm, Senior Loan Originator, NMLS# 2663426. Last reviewed .
The names get used loosely, so here is what each one means. Low-doc or alt-doc means your income is verified with something other than tax returns. No-ratio means the lender does not calculate a debt-to-income ratio at all. No-doc in the old sense, where nobody checked anything, is gone. Even a no-ratio loan checks your credit, your down payment and your reserves closely, because that is all it has to go on.
Investment property is different because the loan is for a business purpose. A DSCR loan looks at whether the rent covers the payment. A no-ratio loan goes a step further and leans on your credit, your down payment and your reserves. Neither asks for pay stubs or tax returns.
For the home you live in, there are two roads. An asset-based loan turns substantial savings or investments into qualifying income by formula, with no job or business income required. It fits retirees and people between ventures. A no-ratio loan skips income entirely and leans on strong credit, a larger down payment and reserves. It is the right tool for a narrow group, and I will tell you if you are in it.
Be careful with anyone advertising a no-doc loan as if it were easy. The real programs exist, and every one of them asks for something in place of income: credit, cash, assets, or rent. If a pitch promises none of those, ask what they are actually checking, and ask to see it in writing.
What I'd do
- Tell me whether you will live in the property. It decides which rules apply.
- If it is a rental, start with the rent and the price. I can tell you quickly whether it qualifies.
- If it is your home, tell me how you are paid, or that you would rather not document income, and I will match the program to it.
- Expect to show credit, cash and reserves on every one of these. Nothing is truly no-questions-asked.
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