Northern Virginia
For consultants, government contractors and business owners in Arlington, Fairfax and Loudoun whose tax returns do not show what they actually earn.
If you consult, contract or run your own shop in Northern Virginia and a lender has already told you no, you probably heard it framed as a problem with your income. It usually is not. It is a problem with which document they were allowed to look at.
So let me explain what actually happens, and what to do about it.
This region has an unusual concentration of people who make good money without a W2. Independent consultants billing federal agencies. Small primes and subs on GovCon contracts. IT and cyber specialists who left a large integrator to work for themselves at a much better rate. Physicians and dentists with their own practices in Fairfax and Loudoun. Contractors and trades feeding the building around Ashburn, Sterling and Gainesville.
Every one of them runs into the same wall at a bank. A conventional loan does not measure what your business brings in. It measures what is left on your tax return after every legitimate deduction you took. Equipment, vehicles, the home office, depreciation, the accountant.
In other words, the better your CPA did their job in April, the smaller your loan looks in June.
There is a second problem specific to contract work. Income tied to contract cycles looks unstable on paper even when it is completely reliable. A recompete year, a gap between task orders, a 1099 total that swung because one contract ended in March and the replacement started in June. An automated underwriting system reads that as risk. A human being who understands how contracting works reads it as normal.
Neither of those is something you talk your way around. It is written into the guidelines. What you can change is which guidelines your file gets read under.
A bank has one shelf. If your file does not fit what is on it, the answer is no, and there is nowhere else for that loan officer to send you.
I work as a broker under Arbor Financial Group, which means I am approved with a range of wholesale lenders. Those lenders have no retail branches, so you cannot walk into one or apply on their website. They only reach borrowers through brokers. That is the piece most people searching for a bank statement loan never find out, and it is why the answer to who offers these loans is almost never a name you would recognize. I wrote a whole page on who actually offers bank statement loans and why you cannot apply directly.
This catches people out, and it works in your favor. The Washington metro area, which includes Arlington, Alexandria, Fairfax, Loudoun and Prince William, is designated a high-cost area. Conforming loan limits in high-cost areas are set well above the national baseline, and they are adjusted every January.
The practical effect is that a price point which would be a jumbo loan almost anywhere else in the country can still be a conforming loan here. I am not going to quote the figure, because it changes annually and a number on a web page goes stale. What I will do is tell you exactly where your price point falls the day we talk.
Where it does go jumbo, and in McLean, Great Falls, Arlington, Vienna, Oakton, Clifton and out through the Loudoun horse country it certainly does, here is the difficulty. A jumbo loan usually carries tighter documentation than a conventional loan, not looser. So the self-employed buyer shopping in exactly those neighborhoods is the buyer most likely to get squeezed, because they need the largest loan and have the least conventional paperwork.
Jumbo plus alternative income documentation is a narrow specialty. It is most of what I do.
If you hold a clearance, you already know that your financial history gets looked at in a way most people never experience. That cuts both ways on a mortgage. Delinquencies and judgments matter more to you than to the average borrower, so a loan that gets declined and re-shopped four times, with a hard credit pull each time, is not a neutral event.
I would rather look at your credit once, tell you which lender fits, and place it there. That is not a sales line, it is just the sensible way to run a file for somebody in your position.
Arlington and Alexandria. Across Fairfax County, including Fairfax City, Vienna, McLean, Great Falls, Falls Church, Reston, Herndon, Oakton, Burke, Clifton and Centreville. Through Loudoun County, including Ashburn, Sterling, Leesburg, Purcellville and Middleburg. Prince William County, including Manassas, Gainesville and Woodbridge. Plus Warrenton in Fauquier and up into Stafford.
I am licensed across all of Virginia and in twelve other states. My office is in Mooresville, North Carolina, on Lake Norman. That matters less than it used to. Almost every file now runs on documents you send from your phone, and I would rather be the broker who knows which lender says yes to your situation than the one whose office you can drive to.
Not sure which program fits? Text me your rough price point and how you are paid, 1099, business deposits or K-1, and I will tell you before you send a single document.
I am Scott Hastings, NMLS #926762. Almost all of my work is with self-employed business owners and real estate investors whose tax returns do not reflect what their business actually does.
I will tell you in the first conversation whether I can help, which program fits, and when a plain conventional loan would serve you better than anything I have described here.
Ask any broker two questions and the answer sorts itself out. How many wholesale lenders are you approved with for non-QM, and have you closed my kind of income before. A broker approved with one lender has one answer for you. What matters far more than a Northern Virginia street address is whether the person is licensed in Virginia and has actually placed bank statement, 1099 and P&L files before.
Yes. Bank statement and 1099 programs do not use tax returns to calculate income. You will still document that the business exists, usually with a business license or formation documents and often a CPA letter, but the returns stay out of the income math.
On a conventional loan they average your net income from two years of returns, which is where contractors get hurt. On a 1099 program the lender starts from your 1099 total and applies an expense factor, so deductions stop driving the result. If your contract mix changed between years, that is worth explaining up front rather than letting an automated system draw its own conclusion.
The Washington metro is a designated high-cost area, so conforming limits here are set well above the national baseline and are adjusted every January. That means a price point which would be jumbo in most of the country can still be conforming in Northern Virginia. Rather than quote a figure that changes annually, I will tell you where your specific number falls when we talk.
No, and on a non-QM file there is no advantage to it. Virginia licensing is what makes someone eligible to do your loan. What decides the outcome is which wholesale lenders your broker is approved with and whether they have closed your kind of income before.
Yes. Virginia is not one of the six places where that program is unavailable, which are Maryland, Maine, Nevada, Pennsylvania, Washington and Washington DC. Those states did not adopt the CDFI exemption to the ability-to-repay rule. Virginia did, so the program works here.
You can verify any mortgage broker or lender, including me, at the NMLS Consumer Access database. Virginia licensing is administered by the Virginia State Corporation Commission Bureau of Financial Institutions.
Find out in one text whether this works for you
Send me two things: roughly what you are buying at and how you get paid, whether that is 1099, business deposits, K-1 or a mix. That is enough for me to tell you which program fits and what it will take.
No application. No documents. Nothing that touches your credit. If a conventional loan would serve you better, I will say so.
Text me: 704-890-7168Or call the same number
Scott Hastings, NMLS #926762. Mortgages by Scott, a division of Arbor Financial Group. 121 N Main St Ste 202, Mooresville NC 28115. Licensed in Virginia. Equal Housing Opportunity. Program guidelines, conforming loan limits and state availability are set by lenders and by law and change without notice. General information, not a commitment to lend or an offer of credit, and no rate, term or approval is promised. Message and data rates may apply.
