With the recent tightening of the real estate credit markets, many lenders who used to offer stated income commercial loans, have stopped offering them.
Why? They were too risky in today's declining market, as many real estate markets across the USA are seeing declining values.
That is the bad news.
The good news is that there are still commercial lenders who will fund a stated income commercial loan, provided that the borrower's credit is decent, above a 600, and the property will pay all expenses.
Most commercial lenders have lowered their loan to value ratios.
Back as recent as 2007, a Borrower could find a lender that would lend up to 90% on a stated income commercial loan.
Those days are gone, at least for the time-being.
Nowadays the best a Borrower can do is a loan to value ratio of 75-80%.
Many commercial lenders are being very conservative on appraisal values.
This means that a property that has a value of $3 million, may be cut by the lender to a value of $2.
7 million.
And, these are only on acceptable properties that will hold their value via the appraisal process.
In late 2007, I started seeing commercial lenders really tighten their guidelines.
Now, i finally see lenders loosen-up a little on guidelines for stated income commercial loans.
My feeling, is that by the middle of 2009, lenders should be back to where they should be regarding stated income commercial loans, both on loans to values as well as credit scores.
In the end, for those who cannot prove income to qualify for a conventional commercial loan, their only option may be a stated income commercial loan.