Mississippi Stated Income Loans: Flexible Lending for Self-Employed and Small Business Owners

Flexible Lending Without the Traditional Red Tape

For mortgage brokers and loan officers in Mississippi, helping self-employed and small business clients secure home financing can be a frustrating task. Traditional underwriting often overlooks the nuanced financial profiles of entrepreneurs, gig workers, and small business owners. That’s where Mississippi stated income loans become a powerful tool—offering a flexible pathway for clients who may not fit the strict documentation mold required by conventional lenders.

Understanding Mississippi’s Independent Workforce

Mississippi is home to thousands of independent contractors, freelancers, and small business owners—many of whom report income that fluctuates or includes substantial write-offs. According to the U.S. Small Business Administration, small businesses make up over 99% of all businesses in the state. These entrepreneurs are vital to Mississippi’s economy but are frequently underserved by traditional lending. Stated income loans step in to meet this demand by providing an alternative route to mortgage qualification.

Self-employed borrowers may include barbers, plumbers, rideshare drivers, personal trainers, farmers, and tech consultants. Each of these borrowers has legitimate income that might not show up clearly on tax returns, particularly if they maximize deductions or operate a seasonal enterprise.

What Makes a Stated Income Loan Different?

Unlike traditional mortgages that require W-2s and tax returns, Mississippi stated income loans emphasize a borrower’s ability to repay using nontraditional income documentation. These programs are ideal for borrowers who have legitimate cash flow but do not show high net income due to business deductions or seasonal income variation. Borrowers can qualify using:

• Personal or business bank statements (12 or 24 months)

• CPA-prepared profit and loss (P&L) statements

• 1099 forms

• A combination of the above

Stated income loans are not “no doc” loans. They require a credible, verifiable paper trail, but not necessarily in the format used by agency loans. This allows brokers to assist borrowers who fall outside the conventional lending grid.

Qualifying for a Mississippi Stated Income Loan

To qualify for a stated income loan in Mississippi through a Non QM Lender like NQM Funding, borrowers typically need:

• A minimum credit score of 620

• Two years of self-employment or relevant 1099 income

• 12–24 months of personal or business bank statements OR a CPA-prepared P&L

• Sufficient reserves (typically 3–6 months of PITIA)

• Maximum loan-to-value (LTV) up to 90% depending on documentation

Income is reviewed differently based on whether the borrower submits personal or business statements. Underwriters may apply an expense factor of 50% or use a custom ratio based on a CPA letter. This helps more borrowers qualify without misrepresenting their earnings.

Flexible Options from Non QM Lenders

NQM Funding’s Flex Select and Flex Supreme programs allow for maximum flexibility. These loans are designed for borrowers with strong business cash flow but limited reportable income on tax returns. Loan amounts can range from $125,000 to multi-million-dollar jumbo mortgages, and some options include interest-only payment features and 40-year terms.

Additional borrower-friendly features include:

• Gift funds allowed for down payment

• Non-occupant co-borrowers permitted

• Asset depletion options for high-net-worth clients

These features expand qualifying pathways and empower brokers to deliver solutions that meet both short-term and long-term client goals.

When Bank Statement Loans Make Sense

A bank statement loan allows your self-employed borrower to qualify using only their bank statements rather than tax returns. This can be personal or business bank statements. For Mississippi borrowers, this approach is particularly useful in industries like agriculture, logistics, or construction where income is seasonal or irregular. Explore this loan product to give your clients more qualifying power.

Lenders typically average the deposits over the 12- or 24-month period. Some programs offer a 2-month bank statement option for high-credit-score borrowers with strong reserves, accelerating the loan process and improving borrower experience.

P&L Loans: Simple, CPA-Verified Income Solutions

Profit and Loss only documentation is another great alternative for self-employed borrowers. This option relies on a year-to-date P&L prepared by a CPA, offering a streamlined solution when bank statement tracking is complex or not ideal. A borrower who’s been self-employed for two years and maintains solid cash flow can benefit from this documentation method with a potentially higher LTV than traditional programs.

A CPA-prepared P&L typically covers the current year plus the prior full year. It includes gross receipts, expenses, and net income—giving the lender enough detail to assess repayment ability while avoiding the need for tax transcripts or IRS forms.

How Stated Income Loans Support Mississippi’s Unique Markets

Mississippi has diverse property markets from Jackson to the Gulf Coast to the agricultural heartland. Stated income loans can support property acquisition and investment in regions where traditional lending can fall short:

• Jackson: Urban professionals with multiple income streams.

• Gulfport & Biloxi: Hospitality and tourism workers with seasonal pay.

• Northern Mississippi: Agricultural borrowers with annual or semi-annual income.

Stated income loans are especially helpful in mixed-use or non-warrantable condo scenarios common in Mississippi’s coastal regions, where traditional financing often falls through.

Loan Purpose Options: From Purchase to Cash-Out

Borrowers in Mississippi can use stated income loans for primary purchases, rate/term refinances, or cash-out refinances. For cash-out loans, at least six months of ownership is required. This option is especially powerful for investors who want to unlock equity in existing properties to expand their real estate holdings or reinvest into their business.

Additionally, cash-out proceeds can be used for debt consolidation, business capital, or home renovations. Many brokers find that pairing stated income loans with renovation budgets allows borrowers to build equity faster while preserving liquidity.

What Mississippi Brokers Need to Know About LTV, Credit, and Assets

Key highlights for Mississippi-based brokers:

• Max LTVs vary based on documentation—up to 90% with 24-month bank statements

• A borrower with only a CPA P&L may qualify for lower LTVs but faster closings

• Minimum credit score is 620; stronger credit opens access to better pricing

• Reserves: typically 3–6 months of PITIA required depending on risk grade

Assets may include personal checking, business accounts, retirement funds (at 60% value), or even equity in existing real estate. Brokers can use these flexible guidelines to creatively position a borrower’s financial profile for approval.

How to Protect Your Pipeline with Non QM Lending

With tightening conventional lending standards, mortgage brokers must offer creative solutions. Stated income loans let you service a wider range of clients—particularly real estate investors and business owners. They also allow you to become a trusted advisor by offering continuity of options when other lenders say no. Partnering with a Non QM Lender ensures you stay competitive and adaptive.

A strong pipeline includes a mix of traditional and Non QM Loan borrowers. By proactively targeting self-employed clients with stated income options, brokers can insulate their business from rate fluctuations and underwriting guideline changes.

Leveraging Tools to Close More Deals

Brokers can prequalify borrowers faster using NQM Funding’s Quick Quote tool. Also, refer self-employed or foreign income borrowers to ITIN loan options or DSCR solutions if they don’t meet traditional loan criteria.

Make use of NQM Funding’s scenario desk, marketing collateral, and deal structuring support to position yourself as a go-to broker for nontraditional lending solutions.

Mississippi-Specific Lending Rules and Notes

While Mississippi allows stated income products, brokers should note that second liens are ineligible. Prepayment penalties are restricted to investment properties only, and all disclosures must comply with business purpose requirements. Mississippi’s regulatory landscape supports non-QM lending but requires full transparency in all borrower communication.

Loan officers should also be aware of county-specific title practices, mobile home land tie-in requirements, and FEMA flood zone overlays—especially near coastal regions.

Why Now Is the Right Time for Stated Income Solutions

With rates still fluctuating and many banks retreating from non-W2 borrower profiles, now is the time for brokers to offer stated income solutions in Mississippi. Whether your client is a contractor in Jackson or a restaurant owner in Biloxi, these programs ensure access to financing that reflects how they truly earn. Don’t let documentation limitations stall your pipeline—explore flexible stated income options today.

Brokers who master stated income lending will stand out in a competitive marketplace and position themselves as long-term partners for entrepreneurial clients across Mississippi.