More and more lenders are offering no-doc mortgage options to help borrowers with tricky income situations with loans to buy or refinance homes. Also called no-income verification mortgage or stated income loan, a no-doc mortgage may help you close your home loan faster, especially if you have complicated tax returns.
Today’s no-income-verification mortgages come with extra consumer protections, making them a viable alternative to traditional home loans.
Buying a home is an exciting milestone for many people. But qualifying for a mortgage can be challenging, especially if you have an irregular income or limited income documents. This is where no income home loans, also known as NINA (no income, no asset) mortgages, come in. As the name suggests, these loans do not require income verification through pay stubs or tax documents.
In this article, I’ll explain what NINA home loans are, who qualifies, the pros and cons, and whether you can still get one of these mortgages in 2023. Let’s dive in!
What Exactly is a No Income Home Loan?
A no income mortgage, or NINA loan, is a type of loan product that does not require the borrower to document or verify their income. The lender does not ask for pay stubs, W-2s, or tax returns when approving these loans.
Instead the lender evaluates the borrower’s ability to repay based on their credit score assets, down payment amount, and the value of the property. NINA loans were common leading up to the 2008 housing crisis but are now niche mortgage products.
These loans are sometimes also called no-doc loans because of the lack of income documentation. They may also be referred to as stated income loans since the borrower simply states their income without proof
How Do No Income Home Loans Work?
NINA home loans function similarly to other types of mortgages with a few key differences:
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No income verification As the name suggests, the main distinguishing factor of these loans is that you do not have to verify your income. This appeals to borrowers like entrepreneurs self-employed or those with irregular incomes.
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Higher down payment: Lenders typically require a down payment of 30-50% on a NINA loan to offset the higher risk. With a conventional loan, you may only need 3-20% down.
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Excellent credit: You’ll need a credit score of at least 700 and a low debt-to-income ratio to qualify for a NINA mortgage. Lenders want to see you are creditworthy.
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Alternative income verification: Some lenders may request bank statements to get an idea of your cash flow or assets like retirement accounts.
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Higher rates and fees: Because they are riskier for lenders, no income home loans often come with higher interest rates, around 0.5 – 1% higher than conventional mortgages.
Who Qualifies for a NINA Home Loan?
These niche mortgage products are suited for borrowers with the following profiles:
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Self-employed individuals like entrepreneurs whose income fluctuates.
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People with commission-based jobs in sales or real estate. Their annual income changes year to year.
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Retirees or others with substantial assets but little regular employment income.
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Real estate investors and landlords buying investment properties. They use future rental income to qualify.
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Anyone lacking traditional W-2 employee income and the documents to prove it.
Typically, you’ll need excellent credit, significant assets, and a large down payment to qualify. Income is not relevant if you check those other boxes.
Pros and Cons of NINA Mortgages
No income home loans can be helpful in the right situations but also have some potential downsides to weigh:
Pros
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Can qualify without income verification
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Faster approval with less paperwork
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Option for borrowers with irregular incomes
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Uses assets rather than income to qualify
Cons
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Very hard to qualify for today
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Require large down payments, often 50%
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Come with higher interest rates
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Riskier for borrowers without steady income
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Difficult to refinance later
As you can see, NINA mortgages allow more flexibility but aren’t necessarily the best option for every homebuyer.
Are No Income Verification Loans Still Available?
During the early 2000s, stated income mortgages were common, fueling the housing bubble. When the market crashed in 2008, these risky loan products fell out of favor. Regulators also cracked down, implementing stricter lending rules.
As a result, NINA home loans are much less common today than 15 years ago. Most conventional lenders no longer offer these niche mortgage products. However, you can still find portfolio lenders, usually smaller independent companies, that provide no income verification loans.
The mortgages they offer are compliant with today’s regulations, meaning they assess the borrower’s ability to repay. You can’t just state any income and get approved.
No income mortgages now make up less than 1% of mortgage originations, per the Consumer Financial Protection Bureau. But they give options to a small pool of eligible borrowers.
Alternatives to NINA Home Loans
If you don’t qualify for a no income verification mortgage, here are a few options to consider instead:
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FHA loans – Require only 3.5% down and have more flexible credit standards.
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VA loans – Offer 100% financing for veterans and service members.
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Subprime lenders – Provide mortgages to borrowers with lower credit scores.
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Manual underwriting – Involves assessing income/assets without relying solely on automated tools. More customized.
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Co-signer – Having a co-signer with higher income/better credit can help you qualify.
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Improve your credit – Take time to increase your credit score and down payment savings.
The bottom line is that no income home loans are much harder to come by after the housing crash. But they haven’t disappeared completely. A few lenders still offer NINA mortgages to eligible borrowers who meet strict criteria. So it is still possible to buy a home without income verification through alternative mortgage products.
No-doc mortgage requirements vs. other types of mortgages
Before you apply for a no-doc mortgage, see if you meet the minimum mortgage requirements for the most common standard mortgage programs. Borrowers often choose conventional loans or FHA loans (backed by the Federal Housing Administration) because of the low down payment requirements.
Conventional loans follow guidelines set by Fannie Mae and Freddie Mac. FHA loans are more lenient than conventional loans. No-doc mortgages typically require higher down payment and credit scores than conventional and FHA loans.
The table below gives you a side-by-side comparison of standard requirements for each loan type.
| Loan requirement | No-doc mortgages | FHA loans | Conventional loans |
|---|---|---|---|
| Down payment | 30% | 3.5% | 3% |
| Credit score | 700 | 580 | 620 |
| Income documents required? | No | Yes | Yes |
| Interest rates | Typically higher than FHA and conventional mortgages | Typically lower than no-doc mortgages | Typically lower than no-doc mortgages |
Pros and cons of a no-doc mortgage
| Pros | Cons |
|---|---|
|
You don’t need to provide tax or income documents You may qualify based only on your assets You may be approved even if your income recently dropped |
You’ll make a higher down payment You’ll usually pay a higher interest rate You’ll need higher credit scores than standard loan programs |
How to get a No Income Verification Mortgage Loan
FAQ
Is it possible to get a mortgage with no income?
How can I buy a house with no source of income?
Is it possible to get a loan with no income?
Are no-doc loans hard to get?
What is a no-income mortgage?
A no-income mortgage, sometimes referred to as a no-doc mortgage, is an option for borrowers with a non-traditional income stream or another source of assets. This type of loan doesn’t require standard income documents to finalize your loan.
What is a no-income-verification mortgage?
A no-income-verification mortgage is a home loan that doesn’t require the documentation that standard loans typically require like pay stubs, W2s or tax returns. However, don’t let the name fool you: Some paperwork is required to get a no-doc loan. The lender accepts other items, such as bank statements, as proof you can repay the mortgage.
Can you get a mortgage without income?
Yes, it’s possible to get a mortgage without a verifiable income. But it’s more challenging than obtaining a mortgage with a regular income stream. If you don’t have a verifiable income stream, then you’ll need enough assets to support the mortgage payments. What loan does not require proof of income?
What is a no-income-no-asset loan?
The no-income-no-asset loan, or NINA loan, allows you to get a mortgage without providing any pay stubs, tax documents or bank statements to verify the source of your down payment funds. Once a popular mortgage option in the years leading up to the Great Recession, the NINA loan had largely disappeared but is now making a comeback.