Portfolio Loan Programs to Meet Every Customer’s Needs.
From purchase to refinance to construction lending, our partners have access to a full range of mortgage products. Our team is dedicated to helping you find the right loan for your clients- with the best rates, terms, and costs – to meet their unique needs. Click the tabs below to learn more about each of our unique mortgage products. Have questions? Contact us today!
Asset Utilization
No W2? No Problem.
Work with clients to qualify for a home purchase or refinance using their liquid assets. Specifically designed for moderate to high net-worth borrowers.
Overview:
- FICO 600+
- Up to 80% CLTV
- Up to 75% LTV (Cash-Out Refinance)
No Tax Returns Needed
- Savings and Checking Accounts — 100%
- Securities — 100%
- Income Calculation — All Eligible Assets divided by 60
- Self-Employed and High Net Worth Borrowers are Welcome
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
Not all potential homeowners choose to fund their home loans in the same way. Sometimes, their income can come from non-traditional sources, such as being self-employed or retired. In some cases, the majority of a person’s actual savings can be in the assets they own rather than in their job income. If lenders looked at job income alone, these people would not qualify for a home loan, but the value of their assets could be plenty to assure the lender that they are not a risk. That is why we have asset utilization programs.
Rather than using their income from employment, borrowers use an asset utilization loan to qualify for a mortgage provided they have substantial assets. In this case, their monthly income is calculated by dividing total liquid assets by 60 months. Using funds from their assets means they do not have to show income from any other source, including employment. So long as they have enough assets to pay for the loan and regular living expenses, they can qualify.
No, you do not. The assets are solely used to demonstrate that they can repay the loan. We look at liquid assets as their loan collateral, similar to how W2s and pay stubs are evaluated for a traditional Government or Conventional loan.
Only certain types of assets will help you qualify for an asset utilization loan. These include their checking or savings accounts, money market accounts, CD (certificate of deposit) accounts, and so on. Certain types of retirement accounts can also qualify, like a 401(k) or an IRA. In addition, certain types of investment accounts like mutual funds, stocks, and bonds may also qualify. Cryptocurrencies are allowed for reserves, down payments, and closing costs.
1099
Applicants who receive a 1099 from an employer as they receive income in either the form of commissions or as an independent contractor.
Overview:
- No Score or FICO 600+
- Up to 90% CLTV for 1099
- Loan Amounts up to $3 Million
- DTI 55% Max
- Cash-Out Available
- 1099 Income Programs uses actual wage information from your 1099 form
- Completed FNMA Form 1005 for 2-Year history with the same employer
- Don’t have to scramble to get tax returns together
- Non-QM mortgages are available for those who don’t meet the traditional mortgage requirements
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
Documentation for the 1099 mortgage is quite minimal, but includes:
- 1099 for the last two years from the same employer — Stability is the key for a mortgage approval.
- Paystub showing year-to-date (YTD) income -OR- acknowledgement from the employer that their 1099 income matches what they report helps us to know they can afford the loan. If they do not have a YTD paystub, a written verification of employment (VOE) will work.
- Proof that they do not have mandatory expenses – mandatory job expenses differ from optional expenses they write off.
- Letter from their certified public accountant (CPA) regarding their expenses – most 1099 contractors have expenses – it comes with the territory.
All borrowers, regardless of their credit score, need 3 months of reserves on hand. Reserves are money they have available (liquid assets) after they pay their down payment and closing costs. It is like an emergency account, letting us know they can cover at least 3 months of mortgage payments if something happens.
To qualify, they will need 3 months principal, interest, real estate taxes, homeowner’s insurance, and HOA dues in a liquid account such as checking savings, CDs, or liquid investments.
If you are a contractor, salesperson, or consultant, you deserve a mortgage just as much as someone with a salaried (W-2) position. If they can prove they can afford the loan and their income is steady, they deserve the same loan treatment.
The 1099 Income Program makes it a lot easier to secure a mortgage despite working as a 1099 employee. With no prepayment penalties on owner-occupied homes or second homes and the allowance of up to 6% of the purchase price for closing costs from interested parties, we make it easy to secure financing to buy a home as a 1099 employee.
ITIN
YES, to True ITIN Borrowers, no Visa, no SSN
Overview:
- Up to 85% LTV
- FICO down to 600
- No FICO up to 75% LTV
- Up to $2.5M loan amount
- Alt-Doc Income options available
- No US visa requirement
- Bank Statements Allowed
- Mortgage Financing for Non-U.S. Citizens
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
It is a pretty straightforward process as we just need to prove the applicant’s eligibility status:
- Borrowers are still eligible if their Green Card has expired.
- Borrowers must present their I-485 (Application to Register Permanent Residence) and their I-797 (Notice of Action) as proof that they have applied for visa renewal.
- The I-797 form cannot say that the borrower’s application for visa renewal has been denied.
- The I-797 form alone is not sufficient for loan eligibility. The borrower must also present their I-485 to prove their legal status in the United States.
- The following visa types are eligible: E1-3, G1-5, H-1, H-1B, L-1, TC and TN-1.
- If the borrower’s visa is sponsored by their employer, the borrower must present written confirmation that their employer is planning to renew it.
- Borrowers must present a valid social security number. A tax ID number is not an acceptable substitute.
- Borrowers with diplomatic immunity are not eligible for the program.
- DACA borrowers are eligible for a mortgage if they meet all requirements outlined above.
DSCR
YES, to Real Estate Investors
Overview:
- FICO 620+
- Up to 80% CLTV
- Loan Amounts up to $3.5 Million
- 40- & 30-Year Fixed, 5/6 & 7/6 ARM terms
- No Income or Employment Verification
- DSCR as low as 0
- Eligible for Non-Permanent Residents and Foreign Nationals (under Foreign National DSCR Program)
- Condotels Allowed
- Easier Approval Process than Traditional Debt-to-Income (DTI) loans
- Work with a Lender that Understands Investment Properties
- First Time Home Buyers Allowed on CBC basis
- First Time Investors Allowed
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
DSCR can have applications in business, government, and personal finances. Like DSCR loans, this ratio is often used in real estate to determine whether an investment property’s cash flow can cover its mortgage payments.
The higher the DSCR, the better the ratio. A DSCR above 1 means that an investment property has positive cash flow and enough net operating income to cover its debts. A DSCR below 1 means it has a negative cash flow, and not enough income to pay its debts. As a rule, anything above 1.25 is considered a good DSCR.
But in the case of investment properties, MCF Mortgage offers DSCR loans. Rather than looking at a borrower’s income, we consider the expected monthly rent from the property. And instead of using the DTI to determine eligibility, we look at the DSCR.
If the rental income is more than enough to pay the mortgage payment, then the borrower may qualify. If the rental income does not cover the mortgage payment, we will probably deny the application.
While DSCR loans may not have the exact same requirements as Conventional mortgages, there are still guidelines real estate investors will have to meet to qualify.
Unlike Conventional mortgages, DSCR mortgages are not backed by entities like Fannie Mae and Freddie Mac. Therefore, there are no standardized requirements. However, there are a few things that we will look at:
DSCR — Generally speaking, most lenders require a DSCR between 1 and 1.5 to qualify for a DSCR loan, with the most common minimum requirement being a DSCR of 1.25. We go as low as zero!
Credit score — Each lender will require a specific credit score, with minimum requirements typically ranging from 620 to 700. We go down to 620.
Down payment — Most DSCR loans have a maximum LTV of 80% — you will need a down payment of at least 20% to qualify. We offer LTVs up to 80%!
Cash reserves — Like other investment properties, DSCR loan lenders require a certain amount of cash reserves, often equal to six months of payments. We only require 3 months of reserves!
Loan amount — The maximum they can borrow for a DSCR loan depends upon the lender, but many financial institutions offer loans up to $2 million. We offer a maximum of $2.5 million!
Prepayment penalty — Unlike Conventional loans and typical investment property loans, many lenders charge prepayment penalties on DSCR loans. We can offer up to 5 years of prepayment penalties!
Property eligibility — DSCR loans can be used for investment properties with one, two, three, or four units. In certain cases, we have been able to approve up to eight units!
DSCR loans have many advantages including:
DSCR — Generally speaking, most lenders require a DSCR between 1 and 1.5 to qualify for a DSCR loan, with the most common minimum requirement being a DSCR of 1.25. We go as low as zero!
Credit score — Each lender will require a specific credit score, with minimum requirements typically ranging from 620 to 700. We go down to 620.
Down payment — Most DSCR loans have a maximum LTV of 80% — you will need a down payment of at least 20% to qualify. We offer LTVs up to 80%!
Cash reserves — Like other investment properties, DSCR loan lenders require a certain amount of cash reserves, often equal to six months of payments. We only require 3 months of reserves!
Loan amount — The maximum they can borrow for a DSCR loan depends upon the lender, but many financial institutions offer loans up to $2 million. We offer a maximum of $2.5 million!
Prepayment penalty — Unlike Conventional loans and typical investment property loans, many lenders charge prepayment penalties on DSCR loans. We can offer up to 5 years of prepayment penalties!
Property eligibility — DSCR loans can be used for investment properties with one, two, three, or four units. In certain cases, we have been able to approve up to eight units!
Bank Statement
YES, to Self-Employed Borrowers
Overview:
- No Score or FICO 600+
- Up to 90% CLTV
- Loan Amounts up to $4 Million
- 40- & 30-Year Fixed
- 3 Months Reserves
- 12- or 24-Months Bank Statements Accepted
- Combination of Business and Personal Bank Statements Allowed
- No Tax Returns Needed
- 12 Months from Bankruptcy or Foreclosure
- Self-Employed and High Net Worth Borrowers are Welcome
- Mortgage History — 0 x 60 x 12
- Condos up to 85% CLTV
- Condo and Condotels Allowed
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
Yes. If borrowers are qualifying for a bank statement loan, you may be asked to provide a letter from a licensed tax preparer. On a Bank Statement Loan, we are not reviewing tax returns, so we rely on third parties such as a licensed tax professional to verify certain aspects of their business.
Here are some examples of the things commonly requested:
- Verify the business’s expense ratio (%)
- Verify the length of time the business has been operational.
- Verify the ownership percentage of the business
Can borrowers whose primary income is derived from Cryptocurrency qualify for a Bank Statement Loan?
Foreign National
YES, to Foreigners with Visas
Overview:
- No Score or FICO 620+
Up to 75% LTV
- Loan Amounts up to $2 Million
- Cash-Out Allowed
- DSCR as low as 0
- Only 1 Credit or Banking Reference Required
- Overseas Assets Allowed as Reserves
- Gift Funds Allowed
- Specialize in Mortgages for People who Reside Abroad
- Process is much more Flexible and Forgiving than other Lenders
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
Borrowers should get the following documents ready before they apply for a Foreign National loan in the US:
- A copy of their passport
- A copy of their unexpired Visa
- A current credit report
- Proof of income for the prior 2 years and the current year
- If self-employed, an accountant’s income letter for the prior 2 years and the current year
- A copy of their purchase contract
These documents should be translated into English by a certified translator. Having all these documents gathered before your clients fill out their applications can save you a great deal of time and hassle.
- Borrowers with diplomatic immunity or otherwise excluded from U.S. jurisdiction
- Residents of any country not permitted to transact business with US companies are ineligible (as determined by any U.S. government authority)
- Irrevocable Trusts or Land Trusts
- Borrowers less than 18 years old
WVOE
YES, to Employees without Tax Returns
Overview:
- No Score or FICO 600+
- Up to 80% LTV for WVOE
- Loan Amount up to $3 Million
- DTI 55% Max
- Cash-Out Available
- Completed FNMA form 1005 for 2-Year History with the same employer
- WVOE form is completed by an employer that confirms Employment and Income details
- Non-QM Mortgages are available for those who don’t meet Traditional Mortgage Requirements
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
If you are a wage earner or has trouble meeting the requirements for Conventional mortgages, WVOE loans might work for them. There are regulations and criteria, but the process is much shorter and less stringent.
Commonly, applicants must submit W-2 forms, pay stubs, and tax returns to apply for a loan. However, MCF Mortgage relies only on their employment and credit history with WVOE loans. If borrowers have proof that they have been working for the past two years in the same company and have a credit score not lower than 599 – they are suitable WVOE loan candidates.
There are numerous reasons to get a WVOE loan including:
- Foreign Nationals and Non-Permanent residents can be approved for WVOE loans.
- WVOEs can work for foreign employers with no rate adjustment.
- No tax return to use rental income, just a lease agreement is acceptable if it is reasonable.
- No tax return or pay stub, they can just state their income.
- 100% gift funds are allowed as long as the income is reasonable.
- The interest rate of WVOE loans can often be better than the Conventional loan rate.
- The max loan amount of WVOE product or P&L product can exceed the county loan limit eligible for the conforming loan limit.
Profit & Loss
YES, to Business Owners
Overview:
- No Score or FICO 600+
- Up to 85% CLTV on 2-Year P&L / Up to 80 CLTV on 1-Year P&L
- Loan Amounts up to $3 Million
- Max DTI 55%
- Max Cash-on-Hand $ Million, no limit CLTV <55%
- P&L by Licensed CPA, Enrolled Tax Agent, or Licensed Tax Preparer
- No Bank Statement Required
- Non-QM 1-year & 2-Year P&L Programs
- Ask your MCF AE about the exception process and possible rate adjustments.
Frequently Asked Questions
A P&L loan gives them a chance to show their company’s profitability even if their tax returns and bank statements do not reflect this information.
While the qualifying factors can be different with each lender, here is what can be expected from MCF Mortgage:
- A credit score of at least 599 – They do not need perfect credit, but they must prove that they can handle their financial obligations
- Proof they have been self-employed for at least 2 years – This gives us the satisfaction of knowing they have been successful for at least 2 years and that their business will continue
- Provide a 12-to-24-month P&L statement – Providing P&L statements that average out the income over 1 to 2 years allows MCF Mortgage to see their business cycles and its difficulties so they do not get pre-approved for a loan that they might not be able to afford year-round.
- Provide a statement from a licensed CPA, enrolled Tax Agent, or licensed Tax Preparer– This endorses the fact that they are self-employed, and the income being claimed on their P&L is accurate and true.
They do not have to supply a reason – as long as they have P&L statements certified by their CPA, tax agent, or tax preparer, they can use them to prove their income. It is a fantastic way to get a mortgage loan much faster without having to mess with the deductions allowed to be taken on income tax returns.
5-10 Unit and Mixed Use
Overview:
- Up to $3M Loan Amount
- Minimum Loan Amount $250K
- FICO down to 660
- Foreign Nationals Allowed
- Gift Funds Allowed
- Ask your MCF AE about the exception process and possible rate adjustments.
Multifamily Property
A multifamily home is a building that houses separate units where more than one family can reside. Some examples of multifamily home types could be a duplex, townhome, condo or small apartment.
Overview:
The Property Has Four Units or Less
At Least 51% Of the Building Is Residential in Nature
Increase Cash Flow
Gain Tax Benefits
Gain Property Management Experience
- For Owner-Occupiers, Reduced or Free Rent
Build Wealth
- Hedge Against Other Investments
Frequently Asked Questions
A multifamily home is a building that houses separate units where more than one family can reside. A multifamily home will have a designated kitchen and bathroom for each unit. Each unit will likely have a separate entrance, separate utility shut-off valves and utility meters.
Some examples of multifamily home types could be a duplex, townhome, condo or small apartment. The biggest distinguishing factor in multifamily properties is each has their own legal address. If you rented your finished basement to a friend and your family resides upstairs but you share a kitchen and front door, this would not be considered a multifamily property.
Fannie Mae, Freddie Mac, and the FHA all define single-family homes as properties with four units or less.
Properties with five or more units are considered commercial real estate. Commercial loans are different and have their own qualifying criteria and approval process that isn’t as user friendly as applying for a residential loan. Multifamily properties are often referred to as investment or rental property and can be purchased with a residential loan.
Multifamily units are in high demand among real estate investors. It takes a lot of time and effort to build a winning portfolio. Investors like that a single transaction could add up to four additional units to their portfolio with minimal effort.
Multifamily homes are great for beginner investors because they can acquire a property with up to four separate units and start building home equity fast. A popular investment strategy many new investors take advantage of is living in one of their units while collecting rent on the others. The investor enjoys both the benefits of homeownership and real estate investing.
Building a successful real estate portfolio is no small task. Purchasing a multifamily property is an excellent way to test the waters and see if real estate investment is right for you. Purchasing a multifamily property as an investment property can help you increase cash flow, gain property management experience, build wealth, and hedge against other investments. There are also many tax benefits to owning a multifamily property. In addition, rental property income counts towards mortgage requirements for future investments. Whether you plan to live in your investment property or manage it, you’ll need a good network of support. Be sure to connect with experienced professionals to advise you along the way.
There are quite a few types of home loans to choose from when you’re ready to purchase your multifamily property. Each has their own unique features and benefits.
Conventional Loans
To qualify for a conventional or conforming loan, you’ll need to have the following:
- Credit score: A minimum credit score of 620
- DTI: Must be below 50%
Conventional loan down payments for a multifamily property vary depending on the number of units and whether it will be the owner’s primary residence.
- Primary residence: If you plan to live in one of the units of your property, you’ll need to put down a minimum of 15% of the purchase price as down payment.
- Three or four units: If you plan to live in the home and there are three to four units, the minimum down payment is 20% of the sale price.
- Investment: If you don’t live in any of the units and the property is strictly an investment, the minimum down payment is 25% of the sale price.
Jumbo Loans
If you don’t qualify for a conforming loan, you can explore a nonconforming mortgage, like a jumbo loan. A jumbo loan is a mortgage that is in an amount above conventional conforming loan limits.
You’ll need the following to qualify:
- Credit score: A minimum credit score of at least 680.
- DTI: Must be below 45%.
Not all lenders offer jumbo loan options for a second home or investment property. If they do, their requirements could be higher based on your loan purpose and the property type. Anticipate a minimum down payment of 15% of the loan amount.
The Jumbo loan from MCF Mortgage is great for primary residence and rental properties. A Jumbo loan allows investors to borrow up to $2 million for an investment property.
FHA Loans
If you don’t have access to funds for a large down payment, you can purchase up to a four-unit property with an FHA loan. You’ll need the following to qualify:
- Credit score: A minimum credit score of 580
- DTI: Must be below 45%
Unlike a conventional loan, the minimum down payment for an FHA loan is 3.5% regardless of how many units are in the home. We need to point out that you must reside in the property in order to qualify for an FHA loan and plan to live there at least a year.
You should also be aware that if you make a down payment of less than 10%, you’ll pay mortgage insurance premiums (MIP) for the life of the loan. If your down payment is more than 10%, you only have to pay MIP for 11 years.
VA Loans
If you’re a qualifying veteran, a VA loan is a great way to start building a real estate portfolio. You’ll need the following to qualify:
- Credit score: The VA does not have a set minimum credit score requirement, but most lenders will have their own requirements. MCF Mortgage requires a minimum credit score of 580 for VA loans.
- DTI: Must be below 41%.
Active-duty service members, reservists, veterans, and surviving spouses of those who passed in service or as a result of a service-connected disability can apply for a VA loan. You will need to meet the standard VA service time requirements and obtain a Certificate of Eligibility. If approved, you can purchase a primary home with up to four units with no down payment. You may also be able to afford a more expensive home through a VA jumbo loan.
Be prepared to pay a one-time funding fee. For a first-time VA borrower, the funding fee is 2.3% of the loan amount. If you’re a disabled veteran or qualifying surviving spouse, you may be exempt from this fee.
There are tremendous tax benefits to real estate investment. Expenses like property tax, insurance, mortgage interest, repairs, and improvements, advertising your property for lease and your property management costs can be deducted.
In addition to those standard deductions, your property might qualify for additional tax benefits of depreciating rental properties. This is done by convincing the IRS that the property in question has a determinable useful life. This deduction is meant to offset the cost of maintenance on a property over time. So, if you plan to hold your investments long term, it may be worth exploring property depreciation with your financial advisor.
If you plan to be an active investor with multiple properties in your portfolio, you should talk to your tax advisor about the ins and outs of 1031 exchanges. A 1031 exchange allows you to sell one investment or business and buy another without incurring capital gains taxes as long as the exchange is completed according to IRS rules and the new property is of the same nature and character as the one being sold.
A 1031 exchange is a deferment, not a credit or reduction. Taxes may not have to be paid at the time of sale, but they will need to be paid eventually.
You can see there are very specific guidelines for a 1031 exchange, so you’ll want to speak with a professional financial or tax advisor to cover all your bases when planning your purchase.
Real estate values are a bit steadier than investments like stocks. Inflation causes the value of stocks to drop but the value of a multifamily property will likely hold steady and in many cases increase in value. The rental property business can’t be outsourced and there is always a need for housing.
Multifamily property owners can occupy their investment property and offset their living costs with the rent they charge tenants. This is called house hacking. Remember our friends Anna and Chris from our earlier example? By choosing a duplex and renting the other unit, they’re able to cover a significant portion of the mortgage while building equity in their home with someone else’s money.
Investment properties build equity pretty quickly. The down payment for a multifamily property can be substantial and the additional rental income being paid monthly helps grow the home’s equity fast. You can then access that home equity with a cash-out refinance to help renovate the property, make necessary repairs, or even purchase more investment properties.
The flexibility and additional income that multiunit properties provide are a great for those new to real estate investing.
Owning a multifamily home is a great hands-on experience for budding investors or property managers. Managing a few units at a time will give you practical hands-on experience that will come in handy when you’re ready to grow your portfolio.
You will need to provide a lease to your tenants that complies with local and state guidelines, you’ll need to collect rents and process requests to maintain the property. Through this experience you will learn your strengths and weaknesses when it comes to real estate investing and property management.
In a multifamily property each unit is paying into the owner’s mortgage, as opposed to a single-family home where the owner is solely responsible for the monthly payment. For example, Anna and Chris are a young couple looking for a new home. They fell in love with a single-family home and a duplex. Both homes are $250,000 and in great locations.
If they choose the duplex, their monthly mortgage expense after their tenant has paid rent would be just $600 a month.
If they choose the single-family home, their monthly mortgage payment would be $2,000. They could save $1,400 per month if they choose the duplex.
Become a Partner.
MCF is looking for experienced loan officers, realtors and builders.
Our Process and Timeline
Five Steps to Funding
Step 1
Reach out to MCF Wholesale to become a partner!
Step 2
Discuss your borrower’s scenario with your MCF AE and submit your loan to underwriting.
Step 3
Provide your MCF account manager with the conditions requested by UW.
Step 4
Close your loan in as few as 15 days.
Step 5
Give yourself a pat on the back!
Let’s work together…become a partner today!
