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Alternative Stated Income Mortgage
Provide your self-employed borrowers with more choices and no income verification requirements

Related Products

Our Alternative Stated Income Mortgage is designed specifically for your self-employed borrowers with high credit quality and large down payments.

With this option, you can offer self-employed borrowers time savings, convenience and financial privacy by eliminating substantial amounts of income documentation. Your borrower only needs to provide a signed IRS Form 4506 or 8821, verifying only income history and source, not amount. By eliminating the need for the large amount of income documentation and complexities inherent in self-employment, you'll be able to offer quicker turnaround times for loan approval and loan closing. Plus, you'll foster a more positive customer relationship by shifting the emphasis from documentation to your borrower's strong credit and capacity.

Product Features

Feature Requirements

Property Type
  • 1-unit primary residences, including condos and PUDs.

Eligible Mortgage Products
  • 15-, 20-, 30- and 40-year fixed-rate mortgages
  • 5- and 7-year balloon/reset mortgages
  • Most standard ARMs

Transaction Type
  • Purchase only

Maximum LTV Ratios (without secondary financing)
  • 75% LTV

 

Down Payment or Closing Costs
  • The greater of $25,000 or 25% down payment required from borrower funds.
  • Down payment amount may come from cash or other certain equity. Gifts, grants and sweat equity are not permitted.

Eligibility/Underwriting
  • Loan Prospector® Accept with a minimum Indicator Score equal to or greater than 720.
  • Non-Loan Prospector mortgages with a minimum Indicator Score equal to or greater than 720.
  • Maximum 41% debt-to-income ratio.
  • 2-year credit history required, with three open trade lines that have been active for two years.
  • Borrower must be self-employed in the same business for at least two years.
  • No 30-day late payments in the last 12 months.
  • No bankruptcy, foreclosure or deed-in-lieu of foreclosure within the last seven years.
  • The Seller is not required to obtain Federal business tax returns, balance sheet or YTD profit and loss for the borrower's business.

Execution Options
  • Servicing-retained Cash
  • WAC ARM Cash
  • Fixed-rate Guarantor
  • WAC ARM Guarantor
  • MultiLender Swap

Delivery Fees
  • An Alternative Stated Income Mortgage postsettlement delivery fee applies. Other delivery fees may apply based on the individual characteristics of the mortgage. See Single-Family Seller/Servicer Guide (Guide) Guide Exhibit 19 [PDF 494K] for details on applicable fees.

Special Delivery Requirements
  • You must deliver all mortgage data required by Form 11 or Form 13SF, as applicable.
  • Offering Code 510

Single-Family Seller/Servicer Guide
  • Refer to Guide Section 37.22 and Section 17.32.


Download an Alternative Stated Income Mortgage fact sheet [PDF 185K] for more details.

Lender Benefits

The Alternative Stated Income Mortgage helps you:

  • Strengthen your offerings by providing a more flexible, streamlined and lower-cost product to your self-employed borrowers through a combination of reduced documentation and competitive pricing.
  • Manage your pipeline more effectively and more efficiently with both cash and securities execution options.
  • Cross-sell other services you offer that appeal to customers with high credit quality and large amounts of cash.

Benefits for Your Borrowers

The Alternative Stated Income Mortgage helps your self-employed borrowers:

  • Purchase their homes faster and with fewer documentation requirements than traditionally possible.
  • Maintain more financial privacy and confidentiality.
  • Maximize financing flexibilities when Alternative Stated Income is coupled with ARM or balloon/reset mortgage advantages.

For More Information

Training Opportunities

Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.



© 2008 Freddie Mac