Alt-Doc ProgramFor the Non-Traditional Borrower
Alt-Doc (Alternative Documentation) is a mortgage program that qualifies homeowners by using non-traditional methods and/or non-traditional documentation to determine qualifying income.
This unique solution has distinct approval parameters for borrowers that have demonstrated the ability to repay (ATR) a loan but cannot qualify for a standard mortgage program. Borrowers looking to take advantage of alternative qualifying methods such as Asset Depletion or as few as 3 months Bank Statements, can do so with lower credit scores (down to 660) and loan-to-values (LTVs) up to 90%.
- The Alt Doc matrix has been expanded and updated to include all documentation options available in one grid including reintroducing the 1 Year Tax Return and 1 Year W2 documentation option as well as increased LTV allowances (up to 90% for a Primary Residence purchase) and decreased FICO requirements (down to 680 for a Cash Out Refinance)
- Delayed Financing option is now treated and priced as a Rate & Term Refinance transaction
- All transactions with a LTV ≤ 60% now require only 3 months reserves
- Appraisal age is limited to 120 days max – Recerts of value are no longer permitted.
- Borrowers who have had a recent forbearance are now eligible as long as they now meet FNMA forbearance reinstatement requirements
- Non-Permanent Resident Aliens: the Visa expiration date has been revised from 3 years to 1 year with additional overlays – see guidelines for specifics.
- Business Funds – guidance has been updated to no longer require a minimum percentage of ownership in order to utilize the funds as qualifying assets towards closing/reserves.
- Cash out proceeds can now be used towards the reserve requirement
- Vested Retirement accounts can now be qualified at 80% of the value for closing/reserves.
- Cryptocurrency is eligible to be used for closing funds and reserves as long as FNMA requirements are met.
- Non-Warrantable Condos are now eligible again up to a max 65% LTV
- Mixed Use property guidance has been added and defined.
Borrowers who do not meet traditional documentation requirements but want the chance to qualify using flexible alternatives.