An abbreviation for a “no income, no job and no assets” loan. It is a loan extended to an unemployed borrower who has still no source of income and no collateralizable property. Unlike most lenders, who typically confine their lending to financially stable, credit-worthy borrowers, i.e., those who have regular incomes or sufficient collateral, NINJA loan makers don’t apply a proper verification or documentation process.

This type of loan, classified as subprime lending, is commonplace in mortgage markets. Basically, a mortgage lender is legally or professionally obliged to verify a set of criteria, in order to approve a loan, among which are: 1) a satisfactory history, that is, no mortgage lates in the last 24 months. 2) a minimum credit score of 660 and 3) a loan to value (LTV) ratio of 75% maximally. For larger loans, the minimum credit score is 700 and the LTV ratio is capped at around 60%. The NINJA loan is very risky for lenders in view of the highly possible inability of borrowers to make repayment especially at times of increasing interest rates or in stagnant or receding real estate markets.