LOAN PROGRAM · TEXAS
Bank Statement loans.
Qualify on deposits, not tax returns.
If you're self-employed and your tax returns show low net income because of legitimate business deductions, traditional underwriting will pass on you — not because you can't afford the home, but because the math your CPA optimized for tax savings doesn't match what an underwriter wants to see. Bank Statement loans qualify you on your actual deposits instead.
How qualifying works
Underwriters analyze 12 or 24 months of business or personal bank statements and calculate qualifying income one of two ways:
- Deposits method — sum the deposits, apply an expense ratio (typically 50%, ranging 25–75% by industry), and that's your monthly qualifying income. Most lenders default to this.
- P&L method — your CPA prepares a profit-and-loss statement, the underwriter cross-references it against deposits, and the lower figure is used.
- Service businesses (consultants, attorneys, agents) usually get the standard 50% ratio; 1099 contractors with minimal overhead sometimes get 25%; inventory-heavy businesses run higher.
Who it's built for
The typical file: two or more years of self-employment in the same industry, 660+ credit, 10–20% down, six months of reserves, and DTI under 50% on the qualifying income. Stronger files — 700+ credit, 20% down, twelve months of reserves — get better rates and broader program access.
Eligible structures include sole proprietors, 1099 contractors, single-member LLCs, S-Corp and C-Corp owners (with K-1s plus business statements), and partnerships. We determine which analysis method fits your structure before anything goes to a lender.
What it costs
Bank Statement loans price roughly 0.5–1.5% above Conventional because they're Non-QM. The math often still works: you qualify for a loan you couldn't otherwise get, the home appreciates regardless of loan type, and you can refinance to Conventional later once your reportable income catches up.
Two pitfalls to avoid
Mixing personal and business accounts makes it hard for an underwriter to separate household spending from business expenses — keep them separate for at least the 12–24 month qualifying window.
Timing matters too: if your most recent return is weak but the business is growing, lenders may average two years. Applying after a strong second consecutive year usually earns better terms. We'll tell you which side of that line you're on in the first review.
Want the deep dive? Read the full Bank Statement loan guide.
FAQ
Common questions.
- Do I need tax returns at all?
- Qualifying income comes from your bank deposits, not your tax return's bottom line. Depending on your business structure, a CPA-prepared P&L or K-1s may be part of the file, but low taxable income won't disqualify you.
- Personal or business bank statements?
- Either can work. Underwriters analyze 12 or 24 months of statements and apply an expense ratio by business type. Clean separation between personal and business accounts strengthens the file.
- How long do I need to be self-employed?
- Two or more years in the same industry is the standard. If your most recent year is strong and the prior year weak, lenders may average the two — sometimes it pays to apply after a second strong year.
- How much more expensive is it than a Conventional loan?
- Rates run roughly 0.5–1.5% above Conventional. Many borrowers refinance into Conventional later once their reportable income supports it.
- How fast can Closewiser tell me what I qualify for?
- Send 12 months of statements and we review them the same day, with an initial letter showing your estimated qualifying income. Clear-to-close typically runs 21–30 days once you're under contract.
See what you qualify for.
Three minutes, no credit pull, no commitment. We respond the same business day — in English or Korean.