I have a client that will not qualify for a mortgage due to income requirements, but owns a home in Coral Gables, FL that he would like to use as collateral for a loan. Let me know if anytime here knows someone that would be interested in looking at it.

Thanks and Gig 'em.

Is the property his primary home or non-owner occupied?

Primary home.

When it is a primary home any loan against the property would require the loan to meet federal abilty to repay (ATR) requirements. That abilty to repay does not have to be just paystubs and tax returns. Self employed can use bank statments for example, Asset depleation is another approach for borrowers with little income but a lot of assets.

We also do the occasional no doc loan on a primary home through CDFI banks. The rates on the no doc loans as you might expect are high, but if they have decent equity and good credit it is an option for borrowers without much other options.

The last option would be a Home equity investment (HEI) but these can be expensive and should only be used in my opnion if credit would preclude any other option.

Sorry for the delayed response. Posted this right before going on a fishing trip.

He owns the property outright and has a securities based line of credit that he used to purchase it. So he is using leverage but there is no lien on the property. What he would prefer is to take some equity out of the house and pay down the securities based line of credit. So trying to figure out the best options for him and your post has shed some light on it.

It can likely be done, and I would be happy to have a phone call about the above chocies to see if any fit, but because it is a primary home it cannot just be looked as collateral like a non-owner occupied property could.

The Texas homestead law is a double edged sword. It certainly protects you from foreclosures due to credit defaults but it also limits the ability to use an asset. This thread is one example.

The Texas cash out laws are another. Texas have a max equity cash out of 80% where all other states have much more generous rules.

One quirky rule when Texas passed the cash out laws were dairy farms were exempt. Like what the heck?some lobbyist got that inserted for reasons I cannot understand.

Yeah Texas homestead laws are strict. This one is in Florida, so I have no idea how they operate over there.

There is no state restrictons in FL, but that does not override the federal abilty to repay requirements.