Bank-statement loans qualify you on your business deposits — 12 or 24 months of them — instead of the number at the bottom of your 1040. If you're self-employed and your write-offs made your income look smaller than it is, this is the loan that actually reflects what you earn.
If you're 1099, an LLC owner, a sole prop, or a small business operator — the standard mortgage was not designed for how your income actually shows up on paper.
We don't ask for 1040s, K-1s, Schedule Cs, or P&Ls. Bank statements are the income doc.
12 or 24 months of personal or business bank statements. Deposits are averaged to build a qualifying income.
As little as 10% down for well-qualified borrowers. Higher LTVs on strong credit + reserves.
Two years of self-employment history required. Some programs allow 1 year with prior W-2 in the same industry.
If your CPA is doing their job, your taxable income is small. Great for the IRS. Terrible for the mortgage the bank runs off it. This program is built around that gap.
LLCs, S-corps, partnerships. Your business made money — your K-1 or Schedule C says otherwise after write-offs.
Trades, consultants, real estate agents, freelancers. Deposits show what the tax return doesn't.
Cash-heavy businesses where deposits track revenue closely — a perfect fit for 12- or 24-month statement programs.
Agents and brokers whose commission income and 1099-MISC schedules complicate a conventional file.
Solo doctors, dentists, attorneys — high-income professionals whose business structure obscures true earnings.
1 year of self-employment plus 2 years W-2 in the same industry can qualify on some programs.
We calculate qualifying income by averaging eligible business deposits across your statement period, applying an expense factor to account for business costs. The result is the income the loan is underwritten against.
12 or 24 months of business or personal bank statements — same account(s).
Total eligible deposits ÷ number of months = monthly gross business income.
50% expense factor is standard. A CPA letter can support lower (25-40%) if your business truly runs leaner.
Result becomes your qualifying monthly income. DTI, DSCR, and loan sizing all key off this number.
Every scenario is different — these are the typical guardrails. When you call, I'll tell you exactly where you sit on each line.
| Guideline | Purchase | Refinance |
|---|---|---|
| Statements | 12 or 24 months, personal or business | 12 or 24 months, personal or business |
| Max LTV | Up to 90% (10% down) | Up to 85% rate/term · up to 80% cash-out |
| Minimum FICO | 620 (some programs allow 600 w/ compensating factors) | 620 |
| Loan amount | Up to $3M (higher case-by-case) | Up to $3M |
| Reserves | 3-12 months, depending on LTV + loan size | 3-12 months |
| Self-employment history | 2 years standard · 1 year w/ 2 years W-2 same industry | 2 years standard |
| Property types | Primary, 2nd home, investment · 1-4 family · condo | Same |
| Terms | 30-yr fixed · 5/6 & 7/6 ARM · interest-only options | Same |
Yes — bank-statement programs price 0.75% to 1.5% higher than a conventional 30-year, depending on FICO, LTV, and reserves. That's the trade for qualifying on deposits. For most self-employed buyers the choice isn't "which loan is cheaper" — it's "which loan actually gets me to the closing table," because the conventional lender told them no.
Some programs allow personal statements if you deposit business income there. Others require dedicated business accounts. If you commingle, we'll pick the program that fits — not the other way around.
The underwriter assumes a portion of your gross deposits went to business expenses. The default is 50%. If your CPA can document that your actual expenses are lower (say, 30% for a service business), we can use that — which increases your qualifying income.
Yes — bank-statement loans work on primary, second home, and investment. For pure rental-property qualifying without personal income at all, look at DSCR loans — the income source is the rental itself.
Same timeline as a conventional loan — typically 30 to 45 days from accepted offer. Bank-statement docs are actually less paperwork than a full-doc self-employed file (no tax returns, no P&Ls, no CPA-drafted forms) so files often move faster.
Yes — if your tax returns eventually show enough documented income, you can refinance out of the bank-statement loan into a lower-rate conventional. Many of my clients do exactly this after 2-3 years of stronger documented income.