Occupany Guidelines

• The property must be purchased as a primary principal residence. This means that all parties on the loan must occupy the property at least six months out of the year.
  
  

Loan Limits

• The maximum loan amount for a stated income loan is a little over $400,000. This is subject to change, and credit history is a major determining factor on how much of a loan you can be approved for by a lender.
  
  

Credit Score

• The current minimum credit score on a stated income loan is 660 points. Higher credit scores can mean better interest rates and payment terms. Recent late payments, charge-offs or collection accounts will result in an automatic denial.
  
  

Closing Costs

• Closing costs can be rolled into the loan or paid for out of seller proceeds on a property purchase. The maximum amount of seller concessions is 6 percent.
  
  

Considerations

• Stated income loans are also known as 80/20 conventional mortgages. This means that you will have two mortgages on the property, the primary will offer a lower interest rate, and the secondary will be at a higher interest rate.
  
  

Expert Insight

• Stated income loans are best used for those with exceptional credit. Individuals having the lowest minimum score required for a stated income loan would be better-served using an FHA loan for a residential purchase, as that is a fixed rate loan.