NIV Overview

Various lenders have different interpretations and application of the No Income Verification (NIV) option. The basic element is that the borrower's income, as reflected on the application, does not require verification.

The No Income Verification (NIV) loan merely accepts the applicant's stated claim about his or her income—within reason.

Although the NIV program will not verify the applicant's income, it will require that the stated income makes sense: it is acceptable for a doctor, lawyer or other professional to state that he or she makes $100,000 a year; however, it is not acceptable for a janitor or clerical employee to state the same thing.

Most NIV loans will still insist on verifying employment, especially if the borrower is not self-employed. If the borrower is self-employed, the self-employment must be documented with a business license, past receipts and/or advertisements. Some lenders only offer NIV loans to self-employed borrowers.

In fact, the NIV loan was initially developed primarily for self-employed borrowers, who had a difficult time documenting their income.

Until recently, practically all NIV programs were non-conforming loans. In recent years, however, some conforming programs have started to offer a limited NIV option for borrowers with very good credit. The interest rates on such conforming NIV programs are much better than standard non-conforming NIV loans.

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