12 Month Bank Statement Program

The 12 month bank statement loan allows self-employed borrowers, business owners, independent contractors, and eligible 1099 borrowers to qualify for a mortgage using bank statement deposits instead of relying exclusively on traditional tax return income.

Rather than averaging two years of tax returns, the lender reviews the most recent 12 months of eligible deposits to determine qualifying monthly income. Personal or business bank statements may be used depending on the borrower, business structure, and lender guidelines. September 2026 Updates:

12 Month Bank Statement Loan Highlights

• Loan amounts up to $4,000,000
• Purchase financing up to 90% LTV
• Cash out refinance up to 85% LTV
• Minimum credit score starting at 600, depending on LTV and loan amount
• Personal or business bank statements may be eligible
• No traditional tax return income calculation
• No mortgage insurance (MI)
• Primary residences, second homes, and investment properties available
• Fixed-rate, ARM, and interest-only options available
• No reserves may be required at or below 75% LTV, subject to program guidelines

Credit Score and LTV Requirements

Maximum financing depends on the borrower’s credit profile, loan purpose, property type, loan amount, and other underwriting requirements.

Credit Score / Maximum LTV:

• 660 Up to 90%
• 640 Up to 85%
• 620 Up to 80%
• 600 Up to 75%

Higher loan-to-value financing generally requires a stronger overall borrower profile. Maximum loan amounts may also vary by credit score and LTV tier.

Qualifying With 12 Months of Bank Statements

The program evaluates cash flow shown on the borrower’s most recent 12 months of bank statements rather than relying solely on adjusted gross income reported on tax returns.

Eligible recurring deposits are reviewed to determine an average monthly income amount for mortgage qualification and debt-to-income ratio purposes. Transfers between accounts, borrowed funds, refunds, and other non-income deposits generally must be identified so they are not incorrectly treated as income.

Personal Bank Statements

When personal bank statements are used, eligible business or self-employment income deposited into the account may be evaluated based on lender guidelines.

Personal statements can be particularly useful for sole proprietors, independent contractors, and self-employed borrowers who regularly deposit business income directly into personal accounts.

Business Bank Statements

When business bank statements are used, eligible deposits are generally adjusted for business operating expenses.

The lender may apply an expense factor to determine the portion of gross business deposits that can be treated as qualifying income. The applicable expense factor depends on the loan program, business characteristics, documentation provided, and underwriting requirements.

No Tax Returns Required for Income Qualification

This 12-month bank statement program provides an alternative to traditional income documentation for eligible borrowers.

Program documentation does eliminate the need to use 1040s, 1120s, K-1s, IRS tax transcripts, or Form 4506-C to calculate qualifying income.

This can be particularly useful for self-employed borrowers whose legitimate business deductions reduce the taxable income appearing on their tax returns.

Purchase, Refinance and Cash-Out Options

The program may be used for:

Purchase transactions with financing up to 90% LTV.

Rate/term refinances for borrowers replacing an existing mortgage(s).

Cash Out Refinances with financing available up to 85% LTV, subject to credit score, property type, loan amount, and underwriting requirements.

Eligible Occupancy and Property Types

The 12 month bank statement loan program may be available for primary residences, second homes, and investment properties.

Eligible residential property types include qualifying single family residences, condominiums, and 2–4 unit properties. Financing for 2–4 unit properties may be available up to 85% LTV depending on the borrower and transaction.

Loan Terms and Interest-Only Options

Available loan structures may include 30-year and 40-year terms, fixed-rate mortgages, adjustable-rate mortgages, and interest-only options.

The appropriate structure depends on the borrower’s objectives, qualifying profile, requested loan amount, property type, and current lender guidelines.

12 Month vs. 24 Month Bank Statement Loans

A 12 month program uses the most recent year of eligible deposits to determine qualifying income.

This can be useful when the borrower’s more recent income is stronger or more representative of current business activity than an older two-year average.

Borrowers with consistent income over a longer period may also consider a 24-month bank statement loan, while borrowers with a shorter available statement history may qualify through eligible 1-, 3-, or 6-month bank statement programs.

Bank Statement Income Pre-Qualification

Before submitting a loan to underwriting, your bank statements can be reviewed to estimate the monthly income that may be available for mortgage qualification.

Eligible deposits, non-income deposits, account activity, ownership percentage, and applicable business expenses can be evaluated to establish a preliminary qualifying-income number and determine which bank statement program may be appropriate.

You can also use the Bank Statement Loan Calculator to estimate qualifying income from eligible deposits.

Program Availability by State

This program is currently offered in eligible transactions in Arizona, California, Colorado, Florida, Georgia, Hawaii, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Utah, and Washington.

Program availability, maximum LTV, credit requirements, loan amounts, and underwriting guidelines are subject to change and may vary by state and borrower profile.

12 Month Bank Statement Loan Pre-Qualification

Questions about this loan program? Speak with a qualified mortgage consultant for a free consultation.

Get pre-qualified for a mortgage without a credit check, soft inquiry, or hard inquiry. Complete our Mortgage Pre-Qualification Form – No Credit Check to connect with a state-licensed loan officer and review available mortgage options based on your income, credit profile, property, and financing objectives.

Free Mortgage Consultation

Last Updated on 4 days ago by Broker Mortgages