BANK STATEMENT ONLY SELF EMPLOYED MORTGAGE LENDERS
Severy All Texas Including Fort Worth Texas, Austin Texas, Dallas Texas, San Antonio Texas,  Houston Texas

US Mortgage Lenders’s Solutions Program offers Non-Qualified Mortgages on 15 & 30-Year Fixed Rate and 5/1 & 7/1 ARM products for loan amounts from $100,000 to $3,000,000 with the following features:

Texas Self Employed Mortgage Lenders Occupancy Types:
 Owner-occupied primary residences
 Second homes

Texas Self Employed Mortgage Lenders Loan Limits
Minimum loan amount: $100,000
Maximum Loan Amount: $3,000,000

Self Employed Mortgage Lenders Transaction Types
 Purchase
 Rate/Term Refinance
 Cash-Out Refinance

Self Employed Mortgage Lenders Documentation Requirments
 Full Documentation with DTI to 50% including Asset Utilization for qualifying income
 Bank Statement Income Documentation
o 24 Month Personal Bank Statements
o 12 Month Personal Bank Statements
o 24 Month Business Bank Statements
 Loan to Value  up to 90%
 Non-warrantable condominiums- OK!

Self Employed Mortgage Lenders Texas Bank Statment Only transactions:
 1-unit primary residence only
 30 year fixed rate only
 Full Documentation or 24 Month Personal Bank Statement Programs are only allowed
 Maximum LTV/CLTV of 80%.
 Points and Fees are limited to 3%.
 Regardless if the new loan is a rate/term or cash-out refinance, any loan classified under Texas law as a
Texas 50(a)(6), must follow the cash-out eligibility matrix and be locked as a cash-out refinance.
 Refer to Bank Statement Mortgage Lenders’s Texas Home Equity Section 50(a)(6) guidelines for additional information.
 All TX 50(a)(6) loans must be must be underwritten by Bank Statement Mortgage Lenders’s Dallas, TX, Regional Office.

Bank Statement Income Documentation is available for self-employed Self Employed Texas Bank Statement Only Mortgage Applicants only. Three bank statement documentation options are available.

 24-month personal bank statements
 12-month personal bank statements
 24-month business bank statements

General Requirements for all Bank Statement Documented Loans:

 Self Employed Texas Bank Statement Only Mortgage Applicants must be self-employed at the same business for at least 2 years.
 All parties listed on each bank account must also be Self Employed Texas Bank Statement Only Mortgage Applicants on the loan.
 Statements must be the most recent months available and must be consecutive.
 Statements must support stable and generally predictable deposits.
1) Unusual deposits must be documented.
2) Deposits/earnings trend should not be declining.
 Up to 3 NSF checks and overdraft protection transfers in the most recent 12-month period are allowed with an
explanation from the borrower.
 Additional income deposited into the bank accounts but derived from a source other than the self-employed
business may not be included in the bank statement average.
1) W-2 earnings or other income sources not associated with self-employment, such as a spouse employed as a
wage earner, must be documented using Full Doc.
2) When wage income is combined with bank statement documentation, a tax return is not required for the full
income documentation, as this would invalidate the bank statements.
3) The 4506T is still required; however, box 8 should be checked to obtain a transcript of W-2 earnings only.
4) Rental income must be documented using Full Doc. Self Employed Texas Bank Statement Only Mortgage Applicants who receive rental income as a secondary
income source may be eligible for Bank Statement Documentation as an exception.
 If the bank statements provided reflect payments being made on obligations not listed on the credit report
additional information must be obtained to determine if the liability should be included in the borrower’s debt-to income ratio.
1)If the obligation does not belong to the borrower, supporting documentation is required.
2) If the borrower is the obligor on the debt, an account statement and pay history should be obtained to review
the account for acceptability. The payment must be included in the debt ratio.
 4506-T is not required except as described above for co-mingled income.
 Tax returns and Transcripts are not required for the program and must not be provided. If Tax returns and/or
Transcript are provided the loan will be ineligible for bank statement documentation.

PERSONAL TEXAS BANK STATEMENT MORTGAGE LENDERS – 12 & 24 Months

Personal Bank Statement Documentation Requirements:

 12 or 24 months complete personal bank statements from the same account (transaction history printouts are not
acceptable)
 Multiple bank accounts may be used; however, only personal, non-business accounts may be used
 Income must be disclosed on the Initial signed 1003
 Standard verification of business requirements apply. Verification must occur within 10 days prior to closing.

Self Employed Mortgage Lenders Bank Statment Only Mortage Lenders Credit Standards:

A tri-merged credit report is required. Unless otherwise addressed below, Fannie Mae underwriting guidelines must be
followed for evaluating a borrower’s credit history. Credit reports with bureaus identified as “frozen” are required to be
unfrozen and a current credit report with all bureaus unfrozen is required.

Self Employed Mortgage Lenders Bank Statment Only Mortage Lenders Credit Scores: The lowest qualifying score of all applicants is used to qualify. The qualifying score is the lower of 2 or
middle of 3 scores for each borrower.

Self Employed Mortgage Lenders Bank Statment Only Mortage Lenders Trade Lines:

 3 open trade lines
o 1 trade line must be open and active for 24 months, AND
o Remaining trade lines must be rated for at least 12 months
 2 open trade lines may be acceptable when they have been reported for 24 months and have activity in the
last 12 months.
 Authorized User accounts may not be used to satisfy the trade line requirements.
 Non-traditional credit or trade lines may not be used to satisfy the trade line requirements.

Credit Evaluation:

All accounts, revolving and installment, reported by the borrower on the application must be verified directly by a credit reference or verified on the credit report. The balance, rating and terms of the account must be verified. If the account has not been updated on the credit report within 90 days of the date of the credit report, a supplement to the credit report or a separate written verification form must be obtained.

 Must be current at closing
 Maximum 2 x 30 and 0 x 60 in most recent 12 months
 Maximum 1 x 60 in months 12 – 24

Self Employed Mortgage Lenders Bank Statment Only Mortage Lenders Housing Payment History:

 0 x 30 mortgage/rental delinquency in the past 24 months.
 This applies to all mortgages and all Self Employed Texas Bank Statement Only Mortgage Applicants on the loan.
 Mortgage/rent must be rated up to and including the month of the new loan closing.
 The subject mortgage must be current at application and closing.

Mortgage history and/or rental history must be verified for the most recent 24 months if this information does not appear on the credit report. Acceptable sources include institutional VOM, institutional VOR or canceled checks. The underwriter must obtain the current balance, current status, monthly payment amount and a payment history for the last 24 months. Direct written verification of rent is acceptable in lieu of canceled checks when the landlord is a large professional

Texas Self Employed Mortgage Lenders Eligible Self Employed Texas Bank Statement Only Mortgage Applicants:

 U.S. citizens
 Permanent resident aliens with the following acceptable documentation:
o I-151 – Permanent Resident Card (Green Card) that does not have an expiration date, or
o I-551 – Permanent Resident Card (Green Card) issued for 10 years that has not expired, or
o I-551 – Conditional Permanent Resident Card (Green Card) issued for 2 years that has an expiration date
accompanied by a copy of USCIS form I-751 requesting removal of the conditions, or
o Un-expired Foreign Passport with an un-expired stamp reading as follows: “Processed for I-551
Temporary Evidence of Lawful Admission for Permanent Residence. Valid until mm-dd-yy. Employment
Authorized.”
 Inter Vivos Revocable Trusts – Refer to Bank Statement Mortgage Lenders’s Living Trust Policy requirements.
 First-time homebuyer (no additional restrictions)

Self Employed Mortgage Lenders Cash-Out Refinance:

 A signed letter from the borrower disclosing the purpose of the cash-out must be obtained on all cash-out
transactions.
 There must be seasoning of at least 6 months (and title must be in the borrower’s name for at least 6
months) since any prior financing (purchase or refinance) was obtained. Note date to note date is used to
determine to season.
 Properties purchased entirely with cash within the last 6 months do not qualify for cash-out but may be
eligible for Delayed Financing. Refer to the Delayed Purchase Refinance section. Other than as provided for
in Delayed Financing, a mortgage taken out on a property previously owned free and clear is always
considered a cash-out refinance.
 Properties that have been listed for sale within the past 6 months of loan application are not eligible for a
cash-out refinance transaction.
 Maximum cash-out limitations include the payoff of any unsecured debt, unseasoned liens, and any cash in
hand.

Self Employed Mortgage Lenders Loan-to-Value (LTV) Calculation:

 If the borrower has less than 12 months ownership of the property, the LTV/CLTV for a refinance transaction
is calculated on the lesser of the purchase price or appraised value.
o For homes where capital improvements have been made to the property after purchase, LTV/CLTV can
be based on the lesser of the current appraised value or original purchase price plus the documented
improvements. Receipts are required to document cost of improvements.
 If the borrower has owned the property for 12 months, the LTV/CLTV is based on the appraised value.

Self Employed Mortgage Lenders Delayed Purchase Refinance:

A Delayed Purchase Refinance is the refinance of a property purchased by the borrower for cash within 6 months of the
current loan application date and requires the following:

 The original transaction must have been an arm’s-length transaction.
 The LTV/CLTV is calculated based on the lesser of the purchase price or appraised value of the subject property.
 Loan is underwritten as a cash-out refinance for LTV/CLTV purposes. Cash back to the borrower in excess of
documented funds used to purchase the property is not allowed.
 The CD from the original purchase. Documentation must show that no financing was obtained for the purchase of the property.
 Funds used to purchase the property must be fully documented and sourced and must be the borrower’s own funds (no borrowed funds, no gift funds, no business funds, no retirement funds, and no pledged assets).
 Reimbursement of business funds, funds secured by a pledged asset, or funds from the borrower’s retirement accountare not considered “borrower’s cash” for the purposes of this Delayed Purchase Refinance program.

Self Employed Mortgage Lenders Regarding Property Flips

Properties acquired within 12 months after the date of the seller’s acquisition where the contract price exceeds the seller’s acquisition price by 10% or more are considered flips.

Texas Property Flips:

 Non-arms length or Identity of Interest transactions are not permitted.
 There can be no pattern of previous flipping as evidenced by multiple transfers in the last 12 months.
 No double escrows or assignment of sales contract.
 Seller of record must own the property at the time of the purchase contract.
 The property must have been marketed openly and fairly, through a multiple listing service, auction, for sale
by owner offering (documented) or developer marketing.
 Value increases must be supported including documented improvements and an additional valuation product
may be required:
o A second appraisal is required if > 10% increase in sales price if seller acquired the property in the past
90 days, or
A second appraisal is required if > 20% increase in sales price if seller acquired the property in the past
91-180 days.

Self Employed Mortgage Lenders Identity of Interest & Non-Arm’s Length
The identity of Interest and Non-Arms Length Transactions describe certain transactions that pose an increased risk. A non-arm’slength transaction is any transaction where there is a relationship or business affiliation between the borrower(s) and/or any parties in the transaction. If a direct relationship exists between any of the parties to a transaction, including the borrower/buyer, property seller, employer, lender, broker or appraiser, then the transaction will be considered non-arm’s
length.

Examples of non arms length transactions include, but are not limited to:

 Family sales or transfers.
 Borrower(s) purchasing a property from a builder who, in turn, is purchasing the borrower’s existing property.
 Renters buying from landlord.
 Property trades between buyer and seller.
 Property seller foreclosure bailouts.
 Employer to employee sales or transfers.
 Self Employed Texas Bank Statement Only Mortgage Applicants or co-Self Employed Texas Bank Statement Only Mortgage Applicants employed in the real estate or construction trades who are involved in the
construction, financing or sale (i.e. listing agent) of the subject property.

Non-Arms length transactions are subject to the following:

 Primary Residence only
 The relationship must be fully disclosed and the Borrower to provide a written explanation stating relationship to
the seller and reason for purchase
 Borrower to provide a copy of the canceled earnest money check
 LTV is based on the lesser of sales price or current appraised value
 Self Employed Texas Bank Statement Only Mortgage Applicants cannot provide services on transaction (closing agent, title agent, appraiser, etc.)
 Bank statement only mortgage applicants may not be an owner of a business entity selling the subject property
 The following additional requirements apply only to family sales:
o Payment history for the seller’s mortgage on the subject property must be obtained and show no pattern
of delinquency within the past 12 months (if applicable)
o Verification that the borrower has not been in title to the property in the past 24 months
o Gift of equity is permitted

Self Employed Mortgage Lenders Underwriting Method

All loans must be manually underwritten and fully documented per these Program Guidelines. If a requirement is not
addressed in these Guidelines, refer to the more restrictive of Bank Statement Mortgage Lenders’s Underwriting Guidelines and Fannie Mae’s Seller
Guide.

All loans are subject to a second level review. Please allow five business days of additional review time at time of initial
approval. Bank Statement Mortgage Lenders underwriters must refer to Bank Statement Mortgage Lenders’s Non-conforming Underwriting Procedures for second level review
requirements and procedures.

Underwriters must complete the Alternative Loan Analysis Form – FM-383 to ensure the loan is processed on the most appropriate program for the applicant.

All loans should contain an Ability to Repay (ATR) Borrower Certification Form signed by the borrower. Bank Statement Mortgage Lenders’s disclosures include an ATR borrower certification form.

Payment History on any other Property (Regardless of Occupancy):

All payment ratings on properties will be considered mortgage credit for grading purposes. Payments on a manufactured home, timeshare, or second mortgage are considered to be mortgage debt, even if reported as an installment loan. Any late payment in the last 24 months on a manufactured home, timeshare, second mortgage, will be considered ineligible for the program.

Bankruptcy / Foreclosure / NOD / Short Sale / Deed-in-Lieu / Restructured (Modified) Loan: Tow years seasoning is required.

Texas Mortage Lenders Allow Collections, Charge-offs, Judgments, Garnishments & Liens:

Delinquent credit including taxes, judgments, charged-off accounts, collection accounts, past-due accounts, tax liens,
mechanics’ liens, and any other liens that have the potential to affect the first lien position or diminish the borrower’s
equity, case by case might need paid off at or prior to closing.

Collection Accounts that meet the following requirements may remain open.

 Collections and charge-offs < 24 months old with a maximum cumulative balance of $2,000 may remain open
 Collections and charge-offs ≥ 24 months old with a maximum of $2,500 per occurrence may remain open
 Cash-out proceeds may not be used to satisfy accounts paid off at closing.
 Any adverse credit, including disputed accounts, on the borrower’s credit report, must be sufficiently explained
by the borrower in writing.
 Medical collection accounts do not have to be paid off.

Inquires: A detailed explanation letter that specifically addresses both the purpose and outcome of each inquiry in the
last 120 days is required. If additional credit was obtained, a verification of that debt must be obtained and the borrowerre-qualified with the additional debt.

Lawsuit or Pending Litigation: If the application, title, or credit documents reveal that the borrower is presently
involved in a lawsuit or pending litigation, a statement from the borrower’s attorney is required. The statement must
explain the circumstances of the lawsuit or litigation and discuss the borrower’s liability and insurance coverage.

Stability of Employment & Income:

 Stable monthly income is the borrower’s verified gross monthly income from all acceptable and verifiable
sources that can reasonably be expected to continue for at least the next 3 years. A 2-year history of
receiving income is required in order for the income to be considered stable and used for qualifying. While
the sources of income may vary, the borrower should have a consistent level of income despite changes in
the sources of income.
 Income from self-employment is considered stable if the borrower has been self-employed for 2 or more
years.
 Frequent job changes to advance within the same line of work may be considered favorable. Job changes
without advancement or in different fields of work should be carefully reviewed to ensure consistent or
increasing income levels and the likelihood of continued stable employment.
 Self Employed Texas Bank Statement Only Mortgage Applicants should provide a signed, written explanation for any employment gaps that exceed 30 days in the
most recent 12-month period, or that exceed 60 days in months 13-24.
 Recent graduates and Self Employed Texas Bank Statement Only Mortgage Applicants re-entering the workforce after an extended period are allowed.
Documentation must support that the borrower was either attending school or in a training program
immediately prior to their current employment history. School transcripts must be provided to document.
 Income may not be used for qualification purposes if it comes from any source that cannot be verified, is not
stable, or will not continue.

POPULAR BANK STATEMENT ONLY PAGES INCLUDE