The Situation
The clients, a married couple in Metro Vancouver, have two children of their own and two foster children who have lived with them since 2019. They were buying a detached eight-bedroom, six-bathroom house with a two-bedroom legal suite, a workshop and parking for an RV, for about $2 million, intending to move in and welcome two more foster children. One client owns an education-consulting business grossing over $500,000 a year; the other has worked for the same insurer for more than 25 years. Credit scores were 764 and 807.
The Challenge
The business pays its owner a T4 of about $50,000 and leaves the rest in the company, the other salary is about $76,000, and roughly $150,000 a year arrives as non-taxable payments for the foster children, which many lenders exclude outright. On the declared figures a $1 million mortgage was out of reach. The suite's rent could help but had to be set at market by an appraiser, and the family's previous home was still being refinanced to produce the down payment.
The Solution
We placed the purchase with an alternative lender under its stated-income program: twelve months of business bank statements documented about $530,000 of revenue, netting about $200,000; the foster-care payments, consistent since 2019 and renewed by agreement every year, were counted as income; the salary and the suite's market rent completed the file, which qualified at a 23% gross and 35% total debt-service ratio. The down payment of about $1 million came from about $850,000 released by the refinance of the family's previous home (its own case study) and a $200,000 gift from a parent. The mortgage of about $1 million, 50% loan-to-value, was a three-year fixed at about 6.7% in 2023, on a 30-year amortization.
The Outcome
The family moved into a home with room for six children, the suite rents, and a conservative 50% loan-to-value mortgage carries it. For self-employed borrowers and foster families alike the lesson is the same: the income that does not appear on a tax return still exists, and the right lender will count it when it is documented properly.