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True stated income loans, the old "just tell us what you make" mortgages, no longer exist in Texas or anywhere else. Federal rules passed after the 2008 crash require lenders to verify a borrower's ability to repay, which killed the no-documentation product. What replaced it is better for honest self-employed borrowers: programs that verify real income from documents you already have, like 12 to 24 months of bank statements, without touching your tax returns.
If you searched for a stated income loan in Texas, you're almost certainly looking for the thing that solves the actual problem, qualifying for a mortgage when your write-offs make your taxable income look too small. The modern non-QM programs do exactly that, and they do it without the fraud risk that sank the original stated income loans.
Here's why the old loans vanished, what took their place, and how to pick the replacement that fits your situation.
Before 2008, a stated income loan let a borrower simply declare an income with little or no proof. Lenders didn't verify it. Underwriters took the number and moved on. They earned the nickname "liar loans" because nothing stopped a borrower, or a loan officer, from inflating income to qualify for a house they couldn't afford.
When the housing market collapsed, those loans were at the center of it. Borrowers defaulted on mortgages they never had the income to support. In response, federal law changed. The Dodd-Frank Act and the Consumer Financial Protection Bureau's Ability-to-Repay rule now require lenders to make a reasonable, good-faith determination that you can actually repay the loan.
That single requirement ended stated income lending. A lender can no longer take your word for it. They have to verify. What the rule doesn't require is that verification come from tax returns, and that opening is where the modern replacements live. They verify income from real, documented sources, they just don't force a self-employed borrower to use a tax return that understates true earnings.
Several non-QM programs now do what stated income loans were supposed to do, without the fraud. Each verifies income differently, so one usually fits better than the others.
The closest replacement for most self-employed borrowers. The lender calculates income from 12 to 24 months of bank deposits, applies an expense factor, and qualifies you on the result. No tax returns. This is the workhorse program, and the details are in what a bank statement loan is.
Built for independent contractors who receive 1099s. The lender uses your 1099 income with a smaller expense deduction than a bank statement calculation. If your write-offs are modest, this can qualify you for more than a bank statement program would.
For real estate investors. A DSCR loan ignores your personal income entirely and qualifies on the rental income the property generates. If you're buying a rental, your own tax returns never enter the picture.
For borrowers with substantial savings but modest documented income. An asset depletion mortgage converts your liquid assets into a qualifying income stream, so retirees and high-net-worth borrowers can qualify from what they've saved.
Each of these verifies income, satisfying the Ability-to-Repay rule, while skipping the tax returns that penalize a write-off-heavy borrower.
The difference between the old product and the new ones comes down to verification. This table lays it out.
| Feature | Old stated income | Modern non-QM (bank statement, etc.) |
|---|---|---|
| Income proof | None, self-declared | Verified from real documents |
| Tax returns required | No | No |
| Legal after 2010 | No | Yes |
| Fraud risk | High | Low, income is documented |
| Who it serves | Anyone (including bad actors) | Honest self-employed and investors |
The headline is that you still skip tax returns, which is what most people wanted from a stated income loan in the first place. You just prove income another way. For an honest borrower whose deposits reflect real earnings, that's a feature, not a hurdle, because the deposits usually show more income than the write-off-shrunk tax return would.
Picking the right replacement depends on how you earn and what you're buying. A quick guide:
Some borrowers qualify under more than one program, and the best choice is whichever produces the strongest file: the highest qualifying income, the best pricing, or the lowest down payment for the situation. A licensed loan officer can run your numbers across programs. If you've already been turned down conventionally, the guide on what to do after a self-employed denial is a useful next read.
Since verification is the whole point now, it helps to see what it looks like in practice. On a bank statement loan, the most common replacement, the process runs like this:
Deposit $20,000 a month into a business account at a 50% expense factor, and you'd show $10,000 in monthly qualifying income. That figure, not a self-declared number, supports your loan. The full mechanics are in how bank statement income is calculated, and you can test your own numbers with the bank statement loan calculator.
The verification is real, but it's built around documents a self-employed borrower already has. No one is asking you to reconstruct two years of tax returns or prove a taxable income your deductions erased. The lender does the calculating; your job is to hand over clean statements and let the deposits make the case for you.
Non-QM programs price differently from conventional loans because they carry more risk for the lender and don't get sold to the same government-backed buyers. Expect terms in this general shape:
The tradeoff is straightforward. You pay a little more for the ability to qualify on real income without tax returns. For a borrower who'd otherwise be denied conventionally, a workable loan at a slightly higher rate beats no loan at all. Many owners treat it as a bridge, then refinance to conventional once their tax returns show enough income, a play covered in the bank statement refinance guide.
Yes on both counts, and that's the key distinction from the old stated income loans. Modern non-QM programs fully comply with the Ability-to-Repay rule because the lender verifies your income from real documents. They aren't a loophole or a return to no-doc lending. They're a legitimate, regulated way to document income differently.
"Non-QM" simply means the loan doesn't fit the Qualified Mortgage box, a specific set of federal guidelines. It does not mean unregulated or risky. Non-QM lenders still have to confirm you can repay. The safety comes from that verification: because your qualifying income is based on documented deposits, you're far less likely to end up in a loan you can't afford, which was the fatal flaw of the original stated income product.
What you should watch for is any offer that sounds like the old days, a lender promising approval with no income verification at all, or guaranteeing a rate before reviewing your file. That's a red flag. Legitimate programs verify, disclose, and follow the rules. To see how a compliant process flows, read how it works.
A few myths follow the phrase "stated income loan" around. Clearing them up saves wasted searching.
The reality is calmer than the myths. These are mainstream tools for people whose income doesn't fit a W-2 box, and they're used every day across Texas by business owners, contractors, realtors, and investors alike. The self-employed share of the workforce keeps growing, and lending has adjusted to it. A generation ago, a write-off-heavy tax return was a wall. Today it's a solvable documentation question, handled by programs built for exactly that borrower.
Numbers make the shift from "stated" to "verified" concrete. Compare how the same borrower fares under the old and new approaches.
Meet a hypothetical Texas freelance marketing consultant. Her business grosses about $240,000 a year. After write-offs for home office, software, contractors, and travel, her tax return shows $85,000 in taxable income. A conventional lender qualifies her on that $85,000, and it isn't enough for the house she wants.
Under the old stated income loan, she'd have simply declared a higher number, unverified, and hoped it flew. Risky and now illegal.
Under a bank statement loan, the lender looks at 12 months of deposits into her business account, roughly $20,000 a month. Consulting carries low overhead, so with a CPA letter documenting a 30% expense ratio (below the default 50%), the lender counts 70% of deposits: about $14,000 a month, or $168,000 a year in qualifying income. That's nearly double her taxable figure, and it's fully verified from real bank records.
The old product and the new one both skip her tax return. The difference is that the bank statement version proves the income with documents, satisfying the Ability-to-Repay rule, while still crediting her for what she actually earns. Test a similar scenario with the bank statement loan calculator to see how deposits translate into buying power.
Stated income loans are gone, but the problem they solved isn't, and the replacements handle it better. A bank statement loan, a 1099 loan, a DSCR loan, or an asset depletion mortgage can qualify you on real, documented income without a single tax return, all while staying fully within federal rules.
The right first step is matching your situation to the right program and confirming your qualifying income. Start with what a bank statement loan is if you're self-employed, or the DSCR guide if you're buying a rental, then review the requirements so nothing surprises you.
Texas Bank Statement Loans is not a lender and this is not a commitment to lend, nor is it a government program. We connect self-employed Texans with licensed mortgage professionals who run these verified-income programs daily. Start with the free 60-second eligibility check to see where you stand. It doesn't pull your credit.
See what you qualify for in 60 seconds, free and no credit check. Use the eligibility check at the top of this page.
No. True stated income loans, where you declared income with no verification, disappeared after the 2008 crash when federal Ability-to-Repay rules required lenders to verify a borrower's income. What exists today are verified programs like bank statement loans that skip tax returns but still document real income.
A bank statement loan for most self-employed borrowers. It qualifies you on 12 to 24 months of deposits instead of tax returns. Depending on how you earn, a 1099 loan, DSCR loan, or asset depletion mortgage may fit even better.
Yes. Modern non-QM programs comply with the federal Ability-to-Repay rule because the lender verifies your income from real documents. That verification is what makes them safe and separates them from the old no-doc stated income loans. Be wary of any offer promising approval with no income verification at all.
No. Non-QM simply means the loan falls outside the Qualified Mortgage guidelines. Many borrowers with strong credit and high incomes use these programs because of how they earn, not because they're high risk. The lender still verifies your ability to repay.
Rates run somewhat above conventional to reflect the alternative documentation and non-QM classification, but the premium is modest, not double. For a borrower who'd otherwise be denied conventionally, it's usually a worthwhile tradeoff. See current pricing on the rates page.
No. Bank statement, 1099, DSCR, and asset depletion programs all skip tax returns. Each verifies income a different way: deposits, 1099s, rental income, or liquid assets. That's the entire appeal for self-employed borrowers.
Often yes. Many owners use a bank statement loan to buy, then refinance into a conventional loan once their tax returns show enough income, since conventional usually prices better. Whether that move saves money depends on how high your write-offs stay.
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