Alternative Income Mortgages

Homeownership or property investment shouldn’t be limited to those with traditional income sources. First Union Home Finance offers alternative income mortgage solutions designed for individuals who might not meet the standard income verification criteria for conventional loans. Whether you’re self-employed, a real estate investor, or earning from non-traditional sources, we provide flexible mortgage options tailored to your unique financial situation.

What is an Alternative Income Mortgage?

Sometimes called a non-traditional or non-qualified mortgage (non-QM), an alternative income mortgage lets borrowers to qualify for a loan using unconventional income documentation. Unlike traditional loans, which rely on W-2s and pay stubs, these mortgages accept other forms of verification to show your ability to repay.

This type of loan is particularly beneficial for individuals with variable income, multiple revenue streams, or those without traditional financial records but who can still meet the repayment requirements.

Do You Qualify for an Alternative Income Mortgage?

Who Benefits from an Alternative Income Mortgage?

This mortgage product is ideal for a variety of borrowers, including:

  • Self-employed professionals: If you’re a freelancer, small business owner, or entrepreneur, traditional income verification methods might not reflect your true earning potential. With an alternative income mortgage, you can qualify using documents like bank statements or profit and loss reports.
  • Real estate investors: If your income comes primarily from rental properties or investments, this mortgage allows you to qualify based on your asset reserves or rental income rather than conventional employment.
  • Gig workers: For individuals whose income comes from gig economy jobs such as ridesharing or freelancing, an alternative income mortgage offers more flexible ways to assess your financial picture, even if your earnings fluctuate.
  • Retirees or asset-rich individuals: If you’re not currently drawing a steady paycheck but have significant assets, such as savings or investments, you can use those to qualify for a loan.
  • Foreign nationals: Even if you lack a U.S. credit history, proof of income or assets can help you secure a mortgage through this program.

This mortgage option is available for both primary residences and investment properties, offering the flexibility to meet various homeownership and investment goals.

Eligibility Criteria

While alternative income mortgages provide greater flexibility, they still have specific documentation requirements, including:

  • Bank statements: Borrowers with non-traditional or fluctuating income may need to provide 12–24 months of personal or business bank statements to demonstrate cash flow.
  • Profit and loss statements: Business owners can use these reports to illustrate their financial stability over a defined period.
  • Asset reserves: Individuals without regular income but with significant liquid assets can apply asset depletion strategies to help meet loan requirements.
  • 1099 forms: Independent contractors and freelancers can present 1099 forms that outline their earnings over a specific period.
  • Rental income: Real estate investors can show proof of rental income from their properties to support their loan application.
  • Credit score: While credit score requirements may be more lenient, the borrower’s score may still be taken into account when applying for an alternative income loan.
  • Debt-to-income ratio (DTI): Lenders will evaluate your overall financial health to ensure your DTI remains within an acceptable range, often below 50%.

How much can you expect to pay?

What Happens After Approval?

Once approved for an alternative income mortgage, you’ll work closely with our dedicated team to finalize loan details, lock in an interest rate, and complete the closing process.

Ready to Explore Your Options?

If you have a non-traditional income and are looking for a mortgage that fits your unique financial circumstances, First Union Home Finance is here to help. We’ll work with you to assess your financial situation and find the right mortgage solution for you. Contact us using the form below to get started!

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