When people talk about “minimum documentation” residential loans, they’re usually referring to mortgage programs that allow borrowers to provide limited income or asset documentation compared to traditional full-doc loans. These are often offered through Non-QM (non-qualified mortgage) lenders, private banks, or portfolio lenders. Here’s a breakdown:

✅ Common Types of Minimum Documentation Residential Loans

  1. Bank Statement Loans

  • Borrowers qualify using 12–24 months of personal or business bank statements instead of tax returns.
  • Used often by self-employed borrowers whose tax returns don’t reflect true cash flow.

Docs Typically Required:

  • Bank statements
  • Identification (driver’s license, SSN/ITIN)
  • Proof of assets (reserves, if required)
  • Business license (sometimes)

  1. Stated Income / Stated Asset Loans (SISA / No Ratio)

  • Borrower states income and/or assets without providing full verification.
  • More common before the 2008 crisis, but now mostly seen with non-QM lenders in niche cases.

Docs Typically Required:

  • ID and credit report
  • Down payment verification (sometimes just a large down payment is required)
  • Appraisal of the property

  1. Asset Depletion Loans

  • Qualification based on liquid assets instead of income.
  • Lender calculates a “monthly income stream” from assets (e.g., divide total assets by 60, 84, or 120 months).

Docs Typically Required:

  • Bank/brokerage statements showing assets
  • ID and credit report
  • Appraisal

  1. No Income, No Employment, No Assets (NINA / DSCR Loans for Investors)

  • For investment properties, qualification is based on property cash flow rather than borrower’s income.
  • Debt Service Coverage Ratio (DSCR) = Rental Income ÷ Proposed Housing Expense.

Docs Typically Required:

  • Lease or market rent analysis (via appraisal)
  • ID and credit report
  • Down payment verification

📋 General "Minimum Doc" Requirements

Even the lowest documentation loans usually require:

  • Government-issued ID
  • Credit report / credit history
  • Appraisal or property valuation
  • Proof of down payment (funds to close)

⚖️ Key Note:
Conventional (Fannie/Freddie) and FHA/VA loans require full documentation (tax returns, W-2s, pay stubs, bank statements). “Minimum doc” programs are generally non-QM loans with higher interest rates and larger down payment requirements (typically 20–30%).