Delaware Stated Income Loans: A Flexible Solution for Seasonal and Commission-Based Workers

Understanding Stated Income Loans and Their Relevance Today

Stated income loans have evolved significantly since their original inception. Once known as “liar loans,” these products fell out of favor following the 2008 financial crisis. However, today’s stated income offerings—now falling under the broader category of Non-QM loans—are far more responsible and regulated. Modern stated income loans require alternative documentation to verify the borrower’s ability to repay, ensuring both flexibility and compliance.

This loan category has become indispensable for borrowers who don’t fit the traditional W-2 income model. For mortgage brokers and loan officers in Delaware, these flexible programs offer a strategic opportunity to serve underserved markets.

Who Benefits Most from Stated Income Loans in Delaware?

Stated income loans are tailored for individuals with variable income streams. This includes:

• Commission-based workers: Real estate agents, financial advisors, and sales professionals often experience income volatility that makes traditional loan qualification difficult.

• Seasonal workers: Industries like tourism, agriculture, and retail frequently rely on labor that earns disproportionately during certain months.

• Self-employed borrowers: Entrepreneurs and freelancers may show low taxable income due to deductions but have high gross revenue.

• Gig economy professionals: Drivers, delivery service providers, and independent contractors are growing segments in today’s economy.

In all these cases, a stated income loan allows the borrower to qualify based on actual income trends—often verified through bank statements, P&L statements, or 1099s.

Why Delaware is an Ideal Market for Stated Income Loan Programs

Delaware’s economic structure is well-suited for stated income programs. The state’s coastal tourism industry fuels seasonal employment, especially in areas like Rehoboth Beach and Lewes. Meanwhile, Wilmington and Dover support a strong base of self-employed professionals and commission earners in finance, legal, and healthcare services.

Sussex County, in particular, is known for its seasonal economy. Here, many workers rely on tourism-based jobs that peak during the summer. Traditional mortgage products rarely accommodate these fluctuations, creating a need for alternative income verification.

Additionally, Delaware’s affordability compared to neighboring states makes it an attractive choice for out-of-state investors and first-time buyers alike. Many of these buyers come with self-employed or variable-income profiles, making the state a prime market for flexible underwriting.

Delaware-Specific Lending Considerations

When working with borrowers in Delaware, mortgage professionals must account for several local nuances:

• Real estate types: Delaware features a mix of rural and coastal properties, many of which are second homes or investment units.

• Legal compliance: Delaware is broker-friendly but demands adherence to Non-QM compliance and proper disclosure practices.

• Prepayment penalties: These are allowed on investment properties under Delaware law, offering brokers flexibility in pricing loan options.

• No MI required: Stated income programs through NQM Funding do not require mortgage insurance, enhancing affordability.

Key Features of NQM Funding’s Stated Income Loan Options

NQM Funding offers powerful solutions through their Non QM Loan programs. Here are highlights relevant to Delaware-based borrowers:

• Up to 90% LTV for purchases and 80% for cash-out refinances

• Minimum credit score of 620 for most programs

• No mortgage insurance required, even on high LTV loans

• Loan amounts starting from $125,000

• Property types: primary, secondary, and investment homes

• Available under multiple income documentation types

• Interest-only options available for flexible monthly budgeting

These features are especially advantageous for borrowers whose income does not translate neatly onto a W-2.

Underwriting Flexibility That Matters

Unlike conventional loans, Delaware stated income programs offer a range of underwriting flexibilities:

• Borrowers may qualify using Bank Statements, P&L only, or 1099s

• No need for tax returns or traditional employment verification

• One-year self-employment history accepted in many cases

• Asset utilization allowed to supplement income

• No housing history required for select programs

Such flexible guidelines are essential when dealing with seasonal, cyclical, or project-based income.

How These Loans Work in Practice

Mortgage professionals in Delaware can structure a variety of loan types using stated income documentation:

• Purchase Loans: Ideal for seasonal workers transitioning into homeownership with sporadic income.

• Cash-Out Refinances: Useful for self-employed borrowers looking to reinvest into their businesses or eliminate debt.

• Rate and Term Refinances: Allows clients to move into more favorable terms without the strict full doc scrutiny.

Even investor clients can benefit through DSCR loans, a related Non-QM program for rental properties with no personal income verification.

Alternative Income Documentation Options

NQM Funding supports several documentation options to suit Delaware borrowers:

• Bank Statement Programs – 2, 12, or 24-month options

• P&L Only – Requires CPA-prepared profit and loss statement

• 1099 Income Programs – Great for contractors and gig economy workers

• Foreign National and ITIN Loans – Expands eligibility for non-citizens

These documentation types allow brokers to customize the experience based on borrower profiles.

When Stated Income is the Best Fit Over Full Doc

Full doc loans may still be ideal for traditionally employed borrowers. However, stated income options outperform when:

• Clients have high gross revenue but low taxable income

• Business reinvestment reduces net profits on tax returns

• Borrowers recently switched to self-employment

• Seasonal employment affects income verification

• Clients need interest-only payment options for liquidity management

How to Start Offering Delaware Stated Income Loans to Your Clients

Mortgage brokers in Delaware can gain a competitive edge by offering this underserved loan type. Start by:

• Using the Quick Quote tool to prequalify borrowers

• Partnering with a reputable Non QM Lender like NQM Funding

• Educating referral partners on how stated income loans can support commission-based clients

• Training your team to evaluate borrower income trends and present flexible documentation options

Compliance and Fair Lending Considerations

Stated income loans must still meet Ability to Repay (ATR) standards. NQM Funding ensures compliance by:

• Accepting verifiable third-party bank statements or CPA docs

• Requiring borrower affidavits or declarations of business purpose (for investment properties)

• Prohibiting predatory structures, as outlined in NQM’s zero-fraud policy

• Ensuring transparent loan disclosures in accordance with federal and Delaware-specific law

Why Mortgage Brokers Should Offer This Product in Delaware

For mortgage brokers and loan officers, stated income loans represent a high-opportunity, low-competition offering. Key advantages include:

• Market differentiation in a saturated lending environment

• Ability to serve a wider range of clients, especially those denied by traditional banks

• Higher loan volume due to underserved borrower pools

• Cross-sell opportunities into DSCR and investor products

• Repeat and referral business from clients impressed by your flexible solutions

By providing tools for borrowers to qualify on real-world terms, brokers solidify long-term relationships while expanding their reach in Delaware.

Challenges Faced by Traditional Borrowers in Delaware

In Delaware, many borrowers are being left behind by conventional underwriting. Traditional loan programs favor predictable income and straightforward employment history, which can disqualify deserving applicants such as:

• Contract professionals in Wilmington’s legal and consulting industries

• Gig economy workers serving Newark’s university and student housing markets

• Shoreline business owners whose profits spike only during summer months

Stated income loans help overcome these gaps by letting borrowers qualify on income patterns reflective of their real financial strength, not just IRS-reported figures.

Case Example: Real-World Borrower Profile

Consider a borrower in Rehoboth Beach who owns a seasonal kayak rental business. During summer, their revenue surges, but off-season income is minimal. Their tax returns reflect modest net profits due to business write-offs. Under full doc rules, this borrower wouldn’t qualify.

However, using a 12-month business bank statement program through a Non QM Loan, the borrower’s gross deposits illustrate strong earning capacity. This scenario demonstrates how brokers can convert challenging files into closed loans with the right tools.

Marketing Tips for Brokers Offering Stated Income Loans

To successfully originate more stated income loans in Delaware:

• Host webinars or seminars for real estate agents who work with commission-based clients

• Run digital ads targeting freelancers, business owners, and seasonal workers in Sussex and Kent counties

• Use testimonials from past self-employed clients (while maintaining compliance)

• Offer bilingual materials to better reach the growing Hispanic and immigrant populations eligible under ITIN guidelines

• Share blog content or SEO articles addressing common myths about Non-QM lending

Working with a Partner That Understands Non-QM

NQM Funding is uniquely positioned to support brokers offering flexible solutions like Delaware stated income loans. With fast approvals, white-glove service, and technology to streamline the submission process, brokers get the support they need to scale their Non-QM pipeline.

In addition to loan programs, NQM provides resources like:

• Scenario support and live pre-underwriting

• Income analysis tools for non-traditional documents

• Dedicated broker portal and marketing materials

• Educational content to help brokers navigate compliance standards

These services enable brokers to expand their reach and deliver better experiences to clients who don’t fit inside traditional lending boxes.

Future of Stated Income Lending in Delaware

As Delaware’s economy continues to evolve, so too does the demand for flexible mortgage options. The rise of remote work, growth in entrepreneurship, and increased homeownership among younger demographics point to a future where more borrowers will require alternatives to traditional documentation.

Stated income loans, when responsibly underwritten, provide the perfect bridge. Delaware’s housing market shows resilience, with appreciation trends in Middletown, Milford, and Bear driven by relocation and investment. These buyers often have strong cash flow but limited tax documentation, making Non QM Loans a natural fit.

For mortgage brokers looking ahead, this trend represents a significant business development opportunity. By positioning themselves as Non-QM experts, brokers can capture more of the market share while helping borrowers achieve homeownership or investment goals on their own terms.

Stay current, stay compliant, and most importantly—stay flexible. The future of lending in Delaware is already here, and it begins with stated income solutions built for the real world.