How to buy a home with no income

How to buy a home with no income

Shelter is one of the most fundamental needs of life. It is a high priority for most Americans. But can you buy a home with no income? Let’s see if it works. 

Becoming a homeowner in America is almost impossible without a mortgage, except you can access other assets or inherit a home. That said, loan lenders rarely give out loans without a source of income. However, there is something called the No-income loan, and it is given to borrowers with no traditional income source. These loans could be approved if the borrower has liquid assets like cash, property, etc., that can sell. 

Most money lenders require proof of income before they entertain loan requests at all. Nevertheless, no-income loans are alternative ways you can repay your debts without earning a dollar. 

How it works 

No-income loans work like every other kind of loan. As long as you can fulfill your obligation to repay, you are good to go. Sometimes, no-income loans require other ways of paying back with interest so lenders may look at your credit history, bank accounts, and proof of assets. 

For instance, if you are recently retired, there’s no income from any form of employment. Yet, you could have some pension that is enough to repay a loan. Again, you could have vehicles, properties, and other assets of value. 

With these, you can approach a lender considering that you can demonstrate enough capital or assets. The lender will then investigate your finances and determine if the risk is worth it. They can then approve your loan when they’re confident that you can pay it back. 

Types of no-income loans 

  • Stated income, verified Assets (SIVA) 
    • A SIVA loan is suitable for someone with not enough income for a loan but enough verified assets to stand as collateral. 
  • No-income, Verified Assets (NIVA)
    • Available to people without traditional or alternative incomes. Therefore, verified assets are used as collateral. 
  • No-income, No Assets (NINA) 
    • This type of loan is reserved for real estate investors who have rental income. However, they must show enough rental income before a loan is approved. 

List of acceptable income and assets in No-income loans 

There are several kinds of assets that you can use to demonstrate payment. However, they must either be monetary compensation, benefits, or alternative income. They include: 

  • Vehicles 
  • House or real estate property
  • Government bond 
  • Appraised valuables 

Other types could be: 

  • Social security benefits 
  • Pension or retirement account 
  • Child support 
  • Veterans Administration benefits 
  • Alimony 
  • Unemployment benefits 
  • Royalty payments 
  • Partner income and more. 

If you cannot sufficiently demonstrate your capability to repay the loan, there are other options. 

You could ask a family member for money on more favorable terms. Or you may consider relying on someone else’s income that is employed and has solid credit. It may be ideal to let them take the lead. If you have wealthy parents that are willing to help, you can reach an agreement that will enable you to satisfy lenders’ requirements. 

Use community resources. Community resources, including utility funds, may cover your expenses for a home without the need to procure a loan.