Self-Employed Investors
Your tax returns don’t tell your story. Programs that qualify on what’s real.
What This Is
Self-employed investors — 1099 contractors, small business owners, real estate professionals, freelancers — write off business expenses aggressively (as they should) which makes their tax returns look like they earn far less than they actually do. Traditional mortgage underwriting uses that net income, disqualifying strong borrowers.
Non-QM and bank statement programs qualify off the actual money flowing through your business — 12 or 24 months of bank statements, P&L, or asset accounts — showing your real cash flow.
How It Helps You
- Qualify on 12–24 months of business or personal bank statements — no tax returns
- Asset-based qualifying if you have investment accounts (uses depletion formula)
- P&L-only programs available for CPAs who can verify
- LLC/S-Corp business owners qualified on business account flow
- 1099 gross income programs (before write-offs) available
- Real estate professional deductions don’t disqualify you
Self-employed investors — 1099 contractors, small business owners, real estate professionals, freelancers — write off business expenses aggressively (as they should) which makes their tax returns look like they earn far less than they actually do. Traditional mortgage underwriting uses that net income, disqualifying strong borrowers.
Non-QM and bank statement programs qualify off the actual money flowing through your business — 12 or 24 months of bank statements, P&L, or asset accounts — showing your real cash flow.
- Qualify on 12–24 months of business or personal bank statements — no tax returns
- Asset-based qualifying if you have investment accounts (uses depletion formula)
- P&L-only programs available for CPAs who can verify
- LLC/S-Corp business owners qualified on business account flow
- 1099 gross income programs (before write-offs) available
- Real estate professional deductions don’t disqualify you
The Deal: Self-employed investor buying a $340,000 single-family rental. Personal tax returns show $52,000 AGI (after $180K in business write-offs). Actual business bank deposits: $28,000/month average.
- Bank Statement DSCR program (24-month business statements)
- Loan amount: $255,000 (75% LTV)
- Down payment: $85,000
- 30-year fixed, illustrative rate 8.15%
- Qualifying income calculated: $28,000/mo × 50% expense factor = $14,000/mo qualifying
- DSCR still applies on the property side (rent qualifies deal)
- Approves cleanly.
Same borrower on a conventional loan would be denied for insufficient income. Non-QM structure = deal closes.
The tax code rewards self-employed borrowers for aggressive deductions. The mortgage system punishes them for it. Non-QM programs fix that mismatch by looking at actual cash flow, not adjusted taxable income.
This is where most self-employed borrowers get told “no” at a bank — and where the right broker finds “yes” three lenders deep in the network.
Illustrative framework:
- Rates: 0.5–1.5% above conventional rates (varies by program)
- LTV: up to 80% purchase, 75% cash-out
- Origination: 1–2 points typical
- Reserves: 6 months PITI
- Credit minimum: 660–680 most programs
- Documentation: 12 or 24 months bank statements, P&L, or asset accounts
- Timeline: 30–40 days close
Different situations call for different lender strengths. Through my network, I can access programs that specialize in:
- 12-month bank statement (fastest self-employed qualification)
- 24-month bank statement (better rates, more program flexibility)
- Personal + business account combo qualifying
- 1-year self-employed programs (for newer businesses)
- Asset depletion (uses retirement/investment accounts as income)
- P&L-only from CPA (no bank statements required)
- No income verification DSCR (property qualifies, borrower documents identity only)
Documents I’ll need:
- Property address + purchase price
- 12–24 months business AND personal bank statements
- Photo ID
- CPA-prepared P&L if going that route
- Business license or LLC docs
- Credit authorization
- No tax returns needed for most programs
Ready to Structure Your Deal?
Tell me the deal. I’ll route it to the right program.