A No Ratio Loan Program is a non-qualified mortgage (non-QM) that allows borrowers to qualify for a home loan without verifying their income or calculating their debt-to-income (DTI) ratio. This program is designed for borrowers with non-traditional income, complex financial situations, or those who prefer not to disclose income details, such as self-employed individuals, real estate investors, or high-net-worth borrowers. Instead of income, lenders focus on the borrower’s credit, assets, and financial stability to assess repayment ability.
No Income Verification: No tax returns, W-2s, 1099s, pay stubs, or profit and loss statements required. Employment verification is also typically not needed.
No DTI Calculation: The debt-to-income ratio is not evaluated, making it ideal for
borrowers with high debt or irregular income.
Eligibility:
- Credit Score: Typically 620–700+ (some lenders accept as low as 580–640 with stricter terms). Higher scores may reduce down payment requirements.
- Down Payment: 10–30% (e.g., 10% with a 720 FICO, 20–30% with lower scores).
- Asset Reserves: Lenders often require 12–24 months of mortgage payments in liquid assets (e.g., cash, savings, or investments). For cash-out refinances, proceeds may count toward reserves if 4 months are covered by existing assets.
- Loan-to-Value (LTV): Up to 80–90% for purchases or refinances, depending on credit and reserves.
