Home Loans for the Self-Employed Borrower
Bank Statement Loan
12/24 Months Bank Statement
Bank Statement mortgage program is the perfect option for self-employed borrowers who need an alternative method to show the true cash flow of their business. Borrowers do not have to own 100% of the business. Self-employed borrowers represent an underserved market in the mortgage industry. Our Bank Statement program provides a loan solution to help underserved credit-worthy self-employed borrowers who otherwise would not qualify for a home loan.
Program Overview
- Loans up to $4 million with a minimum of $150,000
- 12- or 24-months business or personal bank statements
- Two years seasoning for foreclosure, short sale, bankruptcy or deed-in-lieu.
- One year self-employed required on business bank statement only.
- Two years self-employed required on personal bank statement.
- Borrowers can own as little as 50% of the business for business bank statements and 25% for personal bank statements.
- Purchase and cash-out or rate-term refinance
- Owner-occupied, second homes, and non-owner occupied.
- Profit and Loss (P&L) statements are a valid form of income verification.
- Most loans will be qualified on an expense factor of 50%. Companies with a lower expense factor will require a statement from a third-party CPA or tax preparer. (Some industries with traditionally higher expense factors will be underwritten with a 70% expense factor.)
- Non-permanent residents allowed.
- Condo up to 90% CLTV
- Condotels allowed.
- Gift Funds for Reserves allowed Gift Funds for Reserves allowed.
Frequently Asked Questions
A bank statement program is a home loan program that uses bank statements to calculate a borrower’s income. This is an alternative documentation loan type instead of using tax returns and W-2s in the qualification process. These loans are for self-employed borrowers who typically have substantial tax write-offs that make it challenging to demonstrate the necessary income to prove their ability to repay the loan. The bank statement loan programs use either personal or business bank statements to qualify borrowers.
A Bank Statement loan is a home loan program designed for self-employed/ business owners. For qualification purposes, the lender uses the deposits made into the business owner’s account as the source of income for qualification purposes, instead of using the applicant’s tax returns.
Yes, a self-employed borrower can get a mortgage loan using Angel Oak’s industry leading non-QM mortgage programs. Each self-employed borrower will be assessed individually to determine if they qualify for a home loan. Credit scores, income / profits, and other factors will determine the appropriate loan type. Given a self-employed borrower’s unique financial situation, alternative documentation may be needed to calculate a borrower’s income. Angel Oak’s bank statement loan program is designed to help self-employed borrowers, small business owners, and entrepreneurs qualify for a mortgage.
The primary difference between these loan types is that the applicant qualifies based on the deposit income in the bank statements, rather than the applicant’s tax returns.
If their ordinary business income is deposited into a personal account, applicants can use personal bank statements. Keep in mind, that this may potentially complicate the approval process if they share this account with another person, such as a spouse who has a job. If they are a 1099 wage-earner and depositing their income into a personal account, we suggest using our 1099 income program.
1099 Income Loan
Our 1099 income loan option is for underserved self-employed borrowers who are 1099 workers. Many freelancers, contractors, gig economy workers or other self-employed borrowers who file using W-9s cannot qualify for a mortgage under Agency guidelines.
These underserved borrowers can use 1099 earning statements in lieu of tax returns to qualify for a mortgage. Our 1099 Income loan is an alternative loan solution that helps many self-employed 1099 earners achieve homeownership.
1099 Loan is the ideal solution for sole proprietors and contract individuals seeking mortgage financing. Tailored for those with 1099 income, this program requires 1099s for the last two years and a one-year history with the same employer. It allows for gift funds, offers a maximum DTI of 55%, and provides options for cash-outs. Loan amounts can go up to $4 million, with minimal documentation and the flexibility of temporary rate buydowns.
With the simplicity of using 1099 forms as proof of income and requiring just three months of reserves, this program by Novus Home Mortgage is perfect for 1099 workers looking for a streamlined mortgage process.
Program Overview
- No tax returns are required
- Most recent one or two years 1099 plus year to date earning statement allowed
- Year to date earnings are verified from earning statement, paystubs, or bank statements
- 1099s must be from a single employer
- Borrower must be self-employed working for the same employer for two years
- Owner-occupied, second homes, and non-owner occupied
- Purchase and cash-out or rate-term refinance
- Two years seasoning for foreclosure, short sale, bankruptcy or deed-in-lieu
Frequently Asked Questions
Year to date earning are verified from 1099 earning statements, bank statements, and / or paystubs.
Year to date earning are verified from 1099 earning statements, bank statements, and / or paystubs.
Yes, income reported on form 1099-MISC in box 7 is considered non-employee compensation or self-employment income.
P&L Loan
We offer 1-year and 2-year Profit & Loss Statement loans tailored for self-employed individuals. These loans allow borrowers to use their business’s Profit & Loss (P&L) statement to qualify, bypassing traditional income verification.
These loans allow borrowers to use their business’s Profit & Loss (P&L) statement to qualify, bypassing traditional income verification. A Licensed CPA, Enrolled Tax Agent, or Licensed Tax Preparer prepares the P&L statement, crucial for our P&L loan program. We provide loans up to $4 million, with up to 80% CLTV, making our P&L loans a flexible and accessible mortgage solution for self-employed clients.
Frequently Asked Questions
Yes, self employed borrowers who own their own business can use P&L statements to qualify for a loan. This loan option helps those who cannot verify income based on tax returns.
Asset Qualifier
Asset Qualifier loan product is for borrower’s to qualify using their liquid assets. We do not require employment, income or DTI to justify ability-to-repay. We qualify based on required assets that meet seasoning requirements. We have helped retirees, underserved self-employed, divorced with no income, and other borrowers with required seasoned assets to purchase or refinance.
Program Overview
- Loans up to $3 million with a minimum of $250,000
- No employment, no income, no DTI
- Five years seasoning foreclosure, short sale or bankruptcy
- Primary residence only
- Purchase and cash-out or rate-term refinance
- Interest only program available
- All assets must be sourced and seasoned for a minimum of six months
- Required assets: Loan amount, recurring monthly debt multiplied by 60 months, funds to close and six months reserves
- Borrowers must have at least $500,000 in post-closing assets.
Frequently Asked Questions
This program allows a borrower to qualify for a larger loan using their liquid assets. Employment, income or debt to income is not required to justify the ability to repay their debt.
Assets that can be counted include retirement accounts such as IRAs, 401k, annuities and lump sum retirement distributions. Contact an Angel Oak account executive to verify if your account counts as an asset for a mortgage.
We require at least $500,000 in post-closing assets, funds to close and six months reserves are a few of the requirements. An Angel Oak account executive can confirm the required assets needed to qualify.
Not all borrowers fit neatly into the boxes required by traditional lenders. Some borrowers are investors, self-employed, entrepreneurs, retired, or simply living off their investments. They are financially responsible people, but they might not have sources of income that are easily quantifiable. This is where Asset Utilization loan steps into game. They allow these kinds of borrowers to use their personal assets as a means to qualify for a home mortgage.
- Qualifying assets / 60
- 3 month reserves
- Checking, savings, stocks, bonds Savings and checking 100%
- Securities at 100%
- Retirement at 70%
Inquiry Form
