Self Employed Borrowers
Profit and Loss Loan
Now self-employed borrowers can qualify for loans based on their business’s Profit & Loss (P&L) statement. The new streamlined P&L Loan Program is a great solution for business owners with fluctuating seasonal income or cash businesses.
Easy review with no bank statements required for loan amounts up to $1,000,000.
Loan amounts up to $1,500,000 with two months of business bank statements.
LTV up to 80%, depending on borrower's FICO score.
Cash-out up to $500,000 for LTV up to 65% and $350,000 for LTV up to 75%.
No self-employment questionnaire is required.
The P&L must cover the most recent 12 months (dated within 60 days of the closing date).
Borrower must have been self-employed in the same business for 2 years, verified by one of the following: business license, a letter from a tax preparer, Secretary of State filing or equivalent.
Borrower must own a minimum of 50% of the business.
A CPA, IRS Enrolled Agent, or California Tax Education Council must have provided P&L.
Bank Statement Loan
If you have a solid history of financial responsibility and a strong credit rating, but you haven’t been able to get traditional home financing due to your income or your self-employed status, then the bank statement loan program is a type of mortgage that can help you qualify to buy a home or refinance a loan.
Personal bank statements (24 months)
No tax returns required
Borrow up to 85% of the value of the home
Debt-to-income ratio up to 50%
Loans up to $3 million
For primary and secondary homes and investment properties
Non-warrantable condominiums
30-year fixed rate — no pre-payment penalty
Asset Depletion Mortgage
When most people think about home loans, they’re thinking of conventional loans. These loans have strict income verification guidelines, allowing underwriters to verify a borrower’s income in only a few ways — with W-2s, tax returns, and pay stubs.
However, not everyone has these documents, or they may not accurately reflect their full income. Self-employed individuals, retirees, business owners, gig workers, and entrepreneurs don’t have W-2s or paystubs because they don’t have traditional jobs. Meanwhile, these same individuals may take significant deductions during the tax season that reduce their taxable income, so tax returns aren’t always an accurate representation of someone’s financial health.
If you don’t qualify for a conventional mortgage because of these factors, you may still qualify for a non-qualified mortgage like an asset depletion mortgage. But what is an asset depletion loan, and is it the right option for you?
An asset depletion mortgage allows you to qualify for a home loan by converting liquid assets into income.
These home loans are best suited for individuals who don’t have traditional sources of income and documentation like W2s, pay stubs, or tax returns, such as the self-employed, retirees, and high-net-worth individuals.
Liquid assets you may use to qualify you for a mortgage include bank accounts, CDs, investment and retirement accounts, and money market accounts.
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