Bank Statement Underwriting

Our bank statement program allows us to use 12 or 24 months of bank statements in lieu of tax returns to calculate income. This can be a helpful alternative for self-employed purchasers!

This is a conventional 30-year fixed loan and is available starting with a 20%+ down payment.

Two years of being in business, self-employed, is required.

It’s allowable to provide either 12 months of bank statements to document business income, or 24 months.  24 months will be potentially helpful to document stability of income.

Here’s how we calculate the income from the bank statements:



We add up all the allowable deposits to determine the total revenue.


For most purchasers: Your CPA/accountant/tax preparer will write/sign a letter on letterhead. This letter will specify what your business expense ratio is (including cost of goods sold and all other business expenses) based on the most recent year’s filed tax returns. Such statement must not include any unacceptable disclaimer or exculpatory language regarding its preparation.

Or, if you are paid via 1099 and are either 100% commission or a contractor, we can qualify simply using a 10% expense ratio.

FYI: With the CPA’s letter, the minimum allowable expense ratio for qualifying is 20% irrespective of a third-party statement showing a lower expense ratio.



Your qualifying income is what’s left after the expense ratio.  So a total of $100,000 in deposits over two years with a 30% expense ratio is $70,000/24=$2,916.66/month in qualifying income.


  • Unacceptable Deposits: Include but are not limited to the following
    • Cash advances from credit cards
    • Income sources already taken into account
    • Non-business related account transfers
    • Tax refunds
    • Product returns/credits
    • Gift funds
    • Credit line deposits/business financing
    • Paycheck Protection Program (PPP) loans


We will document rental income (if applicable) based on current leases to tenants and bank statements showing receipt of income.  We count 75% of rental income after excluding 25% for potential vacancy.


Pre-Qualify Now: 240 – 479 – 7658