Do Stated Income Loans Still Exist? What Replaced 'Liar Loans'

'Stated income' is one of those phrases that dates a conversation instantly. In the mid-2000s, you could tell a lender what you earned, provide nothing, and close — the industry itself called them liar loans. When the music stopped in 2008, these loans were a headline villain, and the Dodd-Frank rules that followed effectively outlawed them for owner-occupied housing. So what do you do if the *reason* you wanted one — income that's real but hard to paper — still applies? Quite a lot, it turns out.

The ability-to-repay rule now requires lenders to verify — not merely record — a borrower's capacity to pay. A signature on a stated number verifies nothing, so the classic product can't legally exist for a primary residence. This was the rare regulation that everyone in the industry privately agreed with.

• Bank statement programs — your deposits state your income for you, verifiably.
• Asset-based qualifying — your accounts speak instead of your paystubs.
• DSCR loans — on investment property, the rent is the statement; your personal income goes unasked.
• P&L and 1099 programs — lighter-weight professional documentation for defined situations.

The ability-to-repay rule protects owner-occupants; business-purpose loans on investment property play by different rules. That's why a DSCR loan can feel so much like the old stated-income experience — minimal personal documentation, fast path to closing — while being entirely above board: the income being relied on (the property's rent) is appraised and verified. Convenience without the fiction.

So: do stated income loans still exist? As marketed in 2006 — no, and be suspicious of anyone who says otherwise. As an experience — quick, sensible, paperwork-light lending for people with real but unconventional income — they exist in better form than ever. I write them every week.