Undocumented cash income

The NIV option is also advantageous for borrowers with unacceptable income. For example, a borrower may have a live-in roommate who pays rent for a bedroom. But such "boarding" rents are not acceptable with most lenders, as they are not legal apartments.

An NIV program would allow that borrower to qualify for the mortgage, even at a lower income level than normally required.

The NIV program is also often used by borrowers with undocumented income. Many jobs, such as servers, valets, door attendants, bartenders and massage therapists, are still predominantly cash-based. There is often a temptation in those instances to under-report the actual amount of gratuities earned in such employment.

Putting aside the morality of under-reporting income, the NIV programs allow such borrowers to qualify for a larger mortgage loan than their documented income would normally allow.

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