The Bank Statement Mortgage Program provides an alternative income documentation option for self-employed borrowers who may not qualify using traditional tax returns.
Instead of relying primarily on taxable income, qualifying income may be calculated using eligible deposits from personal or business bank statements. Purchase, rate-and-term refinance, and cash-out refinance options are available.
Standard and Jumbo bank statement financing is available up to $8,000,000, with select Super Jumbo Bank Statement loans available up to $12,000,000.
Bank Statement Loan Program Highlights
Key program features may include:
- Personal bank statements accepted
- Business bank statements accepted
- Purchase financing
- Rate-and-term refinance
- Cash-out refinance
- Standard, Jumbo, and Super Jumbo loan options
- Bank statement loan amounts up to $8,000,000
- Select Super Jumbo financing up to $12,000,000
- Cash-out proceeds up to $4,000,000
- Minimum credit score as low as 620 for qualifying Super Jumbo scenarios
- 1099 income may be combined with bank statement income
- Asset depletion may be used as supplemental qualifying income
- No Form 4506-T or 4506-C under applicable bank statement documentation options
Personal and Business Bank Statements
The program may allow qualifying income to be calculated from either personal or business bank statements, depending on how the borrower’s business income is received and documented.
Personal Bank Statements
Personal bank statements may be used when qualifying business income is deposited directly into the borrower’s personal accounts.
Eligible business-related deposits are analyzed to determine the income that may be used for mortgage qualification.
Business Bank Statements
Business bank statements may be used for borrowers whose revenue is deposited into business accounts.
A lender-approved expense factor or other permitted methodology is applied to business deposits to determine qualifying income.
Documentation requirements and expense calculations vary according to the borrower’s business structure and lender guidelines.
Borrower-Prepared Profit and Loss Statement Option
Certain bank statement programs may permit a borrower-prepared, unaudited Profit and Loss Statement supported by the most recent three months of business bank statements.
This documentation can be used to help establish the business’s operating expenses and determine the appropriate qualifying income calculation.
Additional business documentation may be required depending on the lender and loan structure.
Self-Employment Verification
Self-employment must be documented, but traditional two-year tax-return income documentation may not be required.
Depending on the specific program, self-employment may be verified with:
- CPA or tax professional letter
- Business license
- Secretary of State or comparable business registration
- Other third-party verification acceptable to the lender
CPA Letter Option
Certain program options may allow self-employment to be verified through a CPA or qualified tax professional letter documenting the borrower’s business and ownership.
Under applicable guidelines:
- CPA or tax professional letter may verify business details
- A separate P&L may not be required
- Form 4506-T may not be required
- Form 4506-C may not be required
The exact documentation method depends on the bank statement program selected.
1099 Income Option
Qualified borrowers may also be able to use 1099 income as an alternative or supplemental income source.
Depending on the program:
- 1099 income may be used by itself
- Multiple 1099s may be accepted
- 1099 income may be combined with bank statement income
- 1099 income may be combined with asset depletion
- Multiple eligible income sources may be combined to increase total qualifying income
This can be useful for independent contractors and self-employed borrowers whose income comes from several sources.
Asset Depletion as Supplemental Income
Eligible borrower assets may be used to generate additional qualifying income through an asset depletion calculation.
Asset depletion may be combined with bank statement or 1099 income when permitted, potentially increasing qualifying income and helping the borrower satisfy applicable Ability-to-Repay (ATR) requirements.
Eligible assets, depletion calculations, and seasoning requirements are subject to lender guidelines.
Bank Statement Help Desk – Income Analysis
Bank statement income should be analyzed carefully before the loan is submitted to underwriting.
Our Bank Statement Help Desk can perform a pre-underwriting review of the borrower’s statements and supporting documentation to help determine the most favorable qualifying-income calculation available under applicable program guidelines.
Bank Statement Income Optimization
The pre-underwriting analysis can help with:
- Calculating qualifying monthly income
- Identifying eligible business deposits
- Separating income from transfers and non-income deposits
- Reviewing potential business expense calculations
- Evaluating personal versus business bank statement options
- Determining whether 1099 or asset depletion income may supplement bank statement income
- Identifying potential underwriting conditions before lender submission
- Maximizing available qualifying income and purchasing power within lender guidelines
Jumbo Bank Statement Loans Up to $8 Million
Jumbo Bank Statement loans may be available up to $12,000,000 for qualified self-employed borrowers.
Maximum loan amount and LTV depend on factors including:
- Credit score
- Occupancy
- Property type
- Bank statement income
- Assets and reserves
- Loan purpose
- Overall borrower profile
Super Jumbo Bank Statement Loans Up to $12 Million
Select Super Jumbo Bank Statement programs may provide financing up to $12,000,000.
Program highlights may include:
- Loan amounts up to $12,000,000
- Minimum credit score starting at 620 for qualifying scenarios
- Personal or business bank statement qualification
- Purchase and refinance options
- Cash-out proceeds up to $4,000,000
Higher loan amounts are generally subject to additional LTV, reserve, appraisal, liquidity, and underwriting requirements.
Bank Statement Cash-Out Refinance
Qualified borrowers may access up to $4,000,000 in cash-out proceeds under select bank statement and Super Jumbo programs.
Maximum cash-out is subject to:
- Property value
- Loan amount
- Maximum LTV
- Credit score
- Occupancy
- Reserves
- Underwriting requirements
Eligible Property Types
Eligible property types may include:
- Single-family residences
- 2-unit properties
- 3-unit properties
- 4-unit properties
- Warrantable condominiums
- Non-warrantable condominiums
Maximum LTV may vary by property type.
Eligible Occupancy Types
Available occupancy types may include:
- Owner-occupied primary residences
- Second homes
- Investment properties
- Business-purpose investment properties
For 2-4 unit properties, a borrower may also occupy one unit as a primary residence while the remaining units are rented.
Gift Funds
Gift funds may be permitted under applicable program guidelines.
Certain transactions may allow:
- Gift funds up to 15%
- Minimum borrower contribution of 5%
Gift fund requirements vary by occupancy, LTV, loan amount, and borrower profile.
Submit a Bank Statement Loan Scenario
Borrowers can submit their bank statement loan scenario for an initial program review without requiring an upfront credit check.
Loan Scenario Form – No Credit Check Required
For assistance with bank statement income calculations or pre-qualification, contact the Bank Statement Help Desk at 800-718-8906.
States Where the Bank Statement Program Is Available
The Bank Statement Mortgage Program is available in:
Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Hawaii, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and Wisconsin.
Last Updated on 1 month ago by Broker Mortgages