Who it is for
- Self-employed borrowers with strong deposits but low taxable income
- 1099 contractors and freelancers
- Business owners who write off aggressively
- Anyone 2+ years self-employed with clean bank history
Typical Bank Statement Loan Requirements requirements
| Statement history | 12 or 24 months; 24 months usually prices better |
|---|---|
| Expense factor | Typically 50% of business deposits counted; 30% options with CPA letter in some programs |
| Minimum credit score | Typically 660–680; some programs go to 620 with more down |
| Down payment | Usually 10–20%; 10% down needs stronger credit and reserves |
| Max DTI | Typically 50% using the calculated statement income |
| Self-employment history | Usually 2 years; business license, CPA letter or 1099s to prove it |
| Reserves | Commonly 6–12 months of payments |
| Occupancy | Primary, second home and investment all available |
Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.
How it works
- Pick 12 or 24 months of statements; longer history with steady deposits prices better.
- Separate business and personal accounts if you can; commingled accounts get the harsher expense factor.
- Avoid large undocumented transfers between accounts in the months before applying; every big deposit gets questioned.
- Get a CPA letter confirming your business is active if your program offers a better expense factor for it.
- Keep NSF activity and overdrafts at zero; lenders read statements line by line.
Try the Bank Statement Income Calculator
Pros and cons
Advantages
- No tax returns required
- Write-offs do not reduce qualifying income
- Primary, second home and investment eligible
- Up to $3M+ loan amounts at some lenders
Trade-offs
- Higher rates than full-doc loans
- Larger down payment than agency minimums
- Every deposit and transfer gets scrutinized
- NSFs and overdrafts can kill approval
Documents you’ll need
- 12 or 24 months of complete bank statements, all pages
- Business license, CPA letter or 2 years of 1099s proving self-employment
- Photo ID
- 2 months of statements for down payment and reserves (can overlap)
- Profit and loss statement (some programs, as an alternative or supplement)
- Entity documents if closing in an LLC
Bank Statement Loan Requirements FAQ
How is income calculated on a bank statement loan?
The lender averages your monthly deposits over 12 or 24 months, then multiplies by an expense factor, often 50% for business accounts, to estimate take-home income. Personal-account programs may count a higher share.
Do I need 12 or 24 months of bank statements?
Both exist. Twelve months is faster to assemble; 24 months usually earns better pricing and suits borrowers with seasonal income.
What credit score do I need for a bank statement loan?
Typically 660–680 for the best programs. Some lenders go to 620 with a larger down payment and more reserves.
Can I use personal bank statements instead of business?
Yes, many programs accept personal statements and apply a smaller expense factor, or none at all, since personal deposits are closer to take-home pay.
Will transfers between my accounts hurt me?
They can. Lenders exclude transfers between your own accounts from income and will ask you to document any large or unclear movement.
Do overdrafts disqualify me?
Frequent NSFs or overdrafts are one of the most common denial reasons on bank statement loans; lenders treat them as cash-flow instability.
What counts as a deposit for income purposes?
Regular business revenue deposits. Lenders exclude transfers between your own accounts, loan proceeds, tax refunds and one-time windfalls. If a deposit looks unusual, expect to document what it was.
Can I qualify with only 12 months of self-employment history?
Most programs want two years, but a few accept 12 months with strong compensating factors like high credit and large reserves. If you are newly self-employed after years as a W-2 employee in the same field, mention it; some underwriters give credit for that.
Do bank statement loans work for cash-out refinances?
Yes, and they are popular for it. LTV caps run a bit lower than purchases, usually 70-75%, and the seasoning rules mirror other non-QM products. The same statement analysis applies.
How Bank Statement Loan Requirements compare
| Bank Statement Loan Requirements | Bank Statement Loans | P&L-Only Loans | 1099 Loans | |
|---|---|---|---|---|
| Best for | Self-employed borrowers with strong deposits but low taxable income | Business owners and self-employed borrowers with heavy write-offs | Business owners with a CPA-prepared P&L | Sales reps, realtors, nurses, drivers and other 1099 earners |
| Down payment | Usually 10–20%; 10% down needs stronger credit and reserves | , | , | , |
| Credit | Typically 660–680; some programs go to 620 with more down | Typically 620–660 | Typically 640–680 | Typically 620–660 |
| Income docs | , | , | , | , |
Typical ranges, your Loan Estimate or term sheet confirms actual terms.
Coming soon: a 2-minute walkthrough from our loan team.
Related programs
Bank Statement Loans
A bank statement loan is a non-QM mortgage that calculates self-employed income from 12 or 24 months of personal or business bank deposits instead of tax returns.
P&L-Only Loans
A P&L-only loan qualifies a self-employed borrower using a 12- or 24-month profit and loss statement prepared or signed by a CPA, EA or licensed tax preparer, with no tax returns.
1099 Loans
A 1099 loan qualifies independent contractors using their 1099 forms (and sometimes a small expense factor) instead of full tax returns, so write-offs on Schedule C do not shrink your qualifying income..