Stated income mortgage programs, as most people picture them (you name your income and nobody checks), ended after the 2008 crisis. Their modern descendants are very much alive: bank statement loans, DSCR loans, and asset depletion loans. They still verify your ability to repay. They just do it with different documents than a W-2 and two years of tax returns.
This article explains what replaced the old loans, who they fit, what they cost, and how Duane Buziak, a licensed mortgage broker in Virginia, Florida, Tennessee, and Georgia, compares them across 500+ wholesale lenders.
By Duane Buziak, NMLS #1110647
Why True Stated Income Loans Disappeared
Before 2008, “no-doc” and “stated income” loans let borrowers write down an income figure with no verification. Critics called them liar loans, because inflated numbers were easy to submit and easy to approve. Loans made on unverified income defaulted at high rates, and that fed directly into the crisis.
Congress responded with the Dodd-Frank Act in 2010. It required mortgage originators to make a reasonable, good-faith determination that a borrower can repay. The CFPB turned that into the Ability-to-Repay and Qualified Mortgage rule, which you can read on the CFPB Ability-to-Repay/Qualified Mortgage rule page. Under it, income, assets, debts, and credit history must be considered and verified using reliable records. A loan that ignores income entirely is not something a compliant originator can offer on an owner-occupied home.
So when someone searches “stated income mortgage programs” today, they usually mean a non-QM loan. Non-QM (non-qualified mortgage) simply means the loan does not fit the standard QM box, often because income is documented in a nonstandard way. Non-QM is not a synonym for predatory. These loans still require proof of repayment ability; the proof just comes from bank deposits, rental income, or assets instead of tax-return net income.
That is why the old promise (“tell us what you make”) no longer applies, while the underlying need is as real as ever. A restaurant owner whose returns show heavy deductions, or an investor with a dozen rentals, may be strong on cash flow and weak on a conventional income calculation.
A word on who is writing this. Duane Buziak, NMLS #1110647 (Coast2Coast Mortgage LLC, NMLS #376205), is a mortgage broker, not an aggregator and not a direct lending company. A broker shops your file across many wholesale programs and places it where the guidelines fit. That distinction matters for non-QM, where program rules differ widely from one wholesale lender to the next.
The Modern Alternatives: Bank Statement, DSCR, and Asset Depletion
Bank statement loans
A bank statement loan calculates income from 12 or 24 months of deposits instead of tax returns. Programs generally accept either personal or business statements. With business accounts, the underwriter applies an expense factor, a percentage of deposits treated as business costs, since not every dollar deposited is take-home income. A program might use a flat factor or require a CPA letter or profit and loss statement to support a different one. Personal statements usually count deposits more directly, though the rules differ by program.
DSCR loans
DSCR stands for debt service coverage ratio. It is used for investment properties and asks one question: does the property’s rent cover its own payment? You divide monthly rent by PITIA (principal, interest, taxes, insurance, and any association dues). For example, imagine a rental that brings in $2,400 a month with a $2,000 PITIA. The DSCR is 1.2. A ratio of 1.0 means the rent exactly covers the payment, and that is the common benchmark programs look for. Some accept lower ratios with other compensating factors, and many price better above 1.0. Personal income documents are generally not part of the qualification.
Asset depletion
Asset depletion turns liquid assets into qualifying income by dividing them over a set number of months. A retiree with a large brokerage or savings balance but little reportable monthly income can qualify this way. The divisor and the types of assets that count differ by program, so confirm them against the specific guidelines before you rely on any number.
Other options worth knowing
- 1099 and P&L-only programs: income supported by 1099 forms or a CPA-prepared profit and loss statement.
- ITIN loans: for borrowers with an Individual Taxpayer Identification Number rather than a Social Security number.
- Foreign National loans: for non-U.S. residents buying property here, typically documented with international assets and income.
Who Qualifies and What These Loans Cost
These programs tend to fit people whose real earning power does not show up cleanly on a tax return:
- Self-employed business owners with significant write-offs
- Gig workers and 1099 contractors
- Commission earners with variable pay
- Real estate investors buying or refinancing rentals
- Retirees with large assets and modest monthly income
The trade-offs
As of October 2026, non-QM loans generally carry higher rates than comparable conforming loans and often require a larger down payment. The reason is straightforward: the loans sit outside the standard agency box, so investors price in extra risk. Exact rates move daily and depend on credit, loan-to-value, property type, and program, so no honest article can quote one for you. Duane Buziak can pull current pricing from multiple wholesale programs for your scenario, and no rate or approval is guaranteed.
Credit, down payment, and reserves
Minimum credit score, down payment, and cash reserves vary by program and by wholesale lender. Reserves are liquid funds left over after closing, usually measured in months of housing payments. Expect investor and bank statement programs to look at all three together, so a stronger score can offset a lower down payment, and the reverse. Ask for the current guidelines on your specific program rather than relying on a generic range.
Prepayment penalties on DSCR loans
Prepayment penalties are common on DSCR loans. This is a fee if you pay off or refinance early, often within the first few years and often stepping down over time. Ask three things: how long it lasts, how it is calculated, and whether a buyout option exists. A slightly higher rate with no penalty can beat a lower rate with a penalty if you plan to sell or refinance soon.
Worked Example: Qualifying a Self-Employed Borrower on Bank Statements
This is a hypothetical illustration, not a quote. Suppose a self-employed contractor deposited $360,000 into a business account over the last 12 months. The program applies a 50% expense factor.
- Qualifying income: $360,000 × 50% = $180,000 per year
- Monthly qualifying income: $180,000 ÷ 12 = $15,000
- Total monthly obligations (new housing payment plus debts): $4,500
- Debt-to-income (DTI) ratio: $4,500 ÷ $15,000 = 30%
Now take the same borrower on a conventional tax-return calculation. After legitimate write-offs for vehicles, equipment, depreciation, and home office, the net income on the returns might average only $6,000 a month. The same $4,500 in obligations now produces a DTI of $4,500 ÷ $6,000 = 75%. Conventional underwriting, which follows guidelines like those in the Fannie Mae Selling Guide for self-employed income, would not approve that file, even though the business is moving $30,000 a month through its account.
Neither number is wrong. The tax return reflects what the borrower chose to report as taxable profit, and the bank statements reflect cash flow. Non-QM programs exist to bridge that gap.
The details will shift with the program. Expense factors differ (some are flat, some are tied to a CPA letter), DTI limits differ, and some programs average 24 months instead of 12. Treat the figures above as a model for how the math works. Duane Buziak runs your actual deposits against several programs to see which calculation is most favorable and what it does to your pricing.
Broker vs. Single-Shelf Retail Companies: How the Options Compare
Large retail companies such as Rocket Mortgage and Movement Mortgage originate through their own programs and one rate sheet. A broker places loans with many wholesale lenders. Neither model is better for every borrower, and as of October 2026 you should confirm what non-QM or bank statement products Rocket and Movement currently offer directly with them. The comparison below keeps to structural differences.
- Program breadth: Duane Buziak accesses non-QM programs across bank statement, DSCR, asset depletion, 1099, ITIN, and Foreign National loans. A single-shelf company offers whatever sits on its own menu.
- Number of options: 500+ wholesale lenders for Duane Buziak, confirmed internally; one company’s rate sheet for each retail competitor.
- Credit pull process: Up Lending by Duane Buziak offers NoTouch Credit Pull, a soft credit pull mortgage step that lets you see options before any hard inquiry. Retail companies typically ask for a full application and hard pull to produce firm terms.
- Document flexibility: a broker can move your file to whichever program fits your paperwork. A single shelf means one set of guidelines.
- DSCR and bank statement availability: broad through wholesale partners for Duane Buziak; verify directly for each retail company.
- Licensing scope: Duane Buziak is licensed in Virginia, Florida, Tennessee, and Georgia only. Large retail companies are licensed in many more states.
- Where retail companies can win: brand recognition, one company handling origination and servicing, and a fully in-house process.
- Where a broker needs scrutiny: non-QM pricing and prepayment terms vary lender to lender, so compare carefully, and the four-state licensing footprint is narrower.
- Credibility: Duane Buziak is ranked #114 nationally in the Scotsman Guide Top Originators list and was named VA Broker of the Year for 2024-2025.
Duane Buziak confirms NoTouch Credit Pull mechanics when you call, since eligibility for a no-hard-inquiry review depends on your scenario.
How to Get Started Without Hurting Your Credit
Preparation matters more here than with a conventional loan, because the documents are what substitute for tax-return income. A practical sequence:
- Gather 12 to 24 months of bank statements, personal or business depending on the program.
- Add a business license or a CPA letter confirming ownership and years in business.
- Collect government ID and recent statements for any savings, retirement, or brokerage accounts.
- For DSCR, pull current leases or a rent estimate and the property’s tax and insurance figures.
- Request a mortgage pre approval without hard pull through NoTouch Credit Pull, so you can see program options before a hard inquiry touches your score.
Rate shopping with hard pulls at several companies can add inquiries and slow you down. A soft first review lets you compare structures first and commit to a full credit pull only when you pick a direction.
Questions to ask any broker
- What are the rate lock terms and extension costs?
- Is there a prepayment penalty, and how does it step down?
- What expense factor will be applied to my business deposits?
- How many months of reserves are required, and what counts toward them?
Common mistakes
Mixing personal and business funds in one account muddies the deposit analysis. Large unexplained deposits trigger sourcing requests and delays. And applying before your reserves have seasoned (sat in the account long enough to be considered yours) can leave you short at underwriting.
Stated Income Mortgage Programs: Eight Common Questions
Are stated income loans still legal?
Loans with no income verification on owner-occupied homes are effectively gone under the CFPB’s Ability-to-Repay rule. Non-QM loans are legal and widely available. They verify repayment ability using alternative documents such as bank statements, rental income, or assets rather than tax returns.
What is a bank statement loan?
A bank statement loan qualifies you using 12 or 24 months of personal or business bank deposits instead of tax returns. Business deposits usually have an expense factor applied. It is designed for self-employed borrowers whose write-offs lower their taxable income below their true cash flow.
Can I use DSCR with no tax returns?
Generally yes. DSCR loans for investment properties qualify the property’s rent against its payment (PITIA) rather than your personal income. Programs still review credit, reserves, and the property itself, so you are not skipping documentation, only the personal income paperwork.
What credit score do I need?
It depends on the program and the wholesale lender. Non-QM guidelines often set minimum scores, and higher scores generally unlock better pricing and lower down payments. Ask for current requirements for your specific program rather than relying on a general number.
What down payment is typical?
Non-QM loans commonly ask for more down than conforming loans, and the amount varies by program, property type, and credit profile. Investment properties and bank statement scenarios often differ. Duane Buziak can show you current requirements across several programs for your situation.
Are rates higher?
As of October 2026, non-QM rates are generally higher than conforming rates because the loans fall outside standard agency guidelines. The gap changes with the market and your profile. No specific rate is guaranteed; the only way to know is to review current pricing for your file.
Can I refinance later?
Often yes. Many borrowers move from non-QM into a conventional loan once their tax returns reflect higher income or their situation changes. Check for any prepayment penalty first, especially on DSCR loans, since it can affect when refinancing makes financial sense.
Does a soft pull affect my score?
A soft credit pull does not affect your credit score, and a no hard inquiry mortgage pre approval step lets you explore options first. A hard inquiry is typically required later, when you move forward with a full application and formal underwriting.
Documented Income, Different Paperwork: Your Next Step
Today’s “stated income” options are documented alternatives. They exist because plenty of capable borrowers earn money in ways a W-2 does not capture, and they are underwritten with real verification. The right one depends on how you earn, what you are buying, and how long you plan to hold the loan.
The fastest way to find your fit is a no credit hit mortgage application review. Call Duane Buziak at Up Lending by Duane Buziak at 804-212-8663 for a soft-pull review of your options. Ready to experience a fast, simple, and stress-free path to homeownership or refinancing? Connect with our trusted mortgage experts today and discover the right loan solution tailored to your unique financial situation, whether you’re a first-time buyer, seasoned investor, or anywhere in between.