12/24 Month Bank Statement

Min. FICO 620 Up to 90% CLTV

Our 12/24 Month Bank Statement loans are perfect Non-QM options for the self-employed. Even if complex tax deductions make their tax returns less than straightforward, this program can provide a clearer picture of their current income or revenue to help them qualify.

Program features
  • Loan amount up to $4 million
  • DTI up to 55%
  • Minimum 3 months of reserves required
  • Maximum cash-in-hand $1 million, no limit for CLTV <55%
  • Mortgage history 0 x 60 x 12
Why choose our 12/24 Month Bank Statement?
  • Free service to calculate income
  • Combined statements accepted
  • No tax returns required
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Program details

Personal, business, or combined bank statement
3 months of reserves
Concierge Service for income calculation
Min FICO 620
Up to 90% СLTV purchase / Up to 80% СLTV cash-out
Up to $4 million purchase / Up to $3 million cash-out
Max cash-in-hand $1 million, no limit for CLTV <55%
12/24 month bank statement (personal / business / combined); 100% deposits for personal, 50% standard expense ratio for business, can be lowered with CPA letter
Up to 55% DTI on owner-occupied
3 months of reserves required
Primary, second home, investment
25% ownership required
Gift funds allowed (can be used as reserves for purchase transactions)
0 x 60 x 12
12 months from bankruptcy or foreclosure
SFR, townhomes, condo warrantable/non-warrantable, condotels, 2-4 units, PUD, short-term rentals, SFR rural, manufactured housing, leasehold
40- & 30-year fixed, 5/6 & 7/6 ARM terms
120 months of I/O period, 240/360 months of amortization, qualified at amortized PITIA payment after I/O period, IO product not allowed in IL
Eligible for non-permanent residents
Individuals, LLCs/Corp without a hit
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12/24 Month Bank Statement FAQ

What is a Bank Statement Loan?

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.

Is a Bank Statement Loan a Subprime Loan?

Bank Statement loans are not subprime loans. Instead, it is a secondary market loan program for Non-QM loans that qualifies the applicant’s income; however, it uses alternative ways to qualify the applicant. Many Non-QM programs like Bank Statement Loans, are designed around the lending needs of a certain market segment. Bank Statement Loans are designed for the unique lending needs of Self-employed/ business owners.

What is the difference between a bank statement loan and a traditional loan program?

The primary difference between these loan types is that the applicant qualifies based on the deposit income in the bank statement, rather than the applicant’s tax returns.

How long must a borrower be in business to qualify for a Bank Statement Loan?

At least 24 months old to qualify for a Bank Statement Loan.

What if your borrower’s business had a bad year in 2020 due to COVID-19, but it rebounded significantly in 2021. How does this affect their loan approval with a Bank Statement Loan?

For Bank Statement loans, we normally ask applicants to provide the most recent 24 months of bank statement, but there are times when reviewing only the most recent 12 months is a better approach, especially if their business suffered an unusually down year as many did in 2020. A&D works with your clients to determine which path is the best for them and their situation and goals.

Can a borrower use PERSONAL bank statement on a Bank Statement Loan?

If their ordinary business income is deposited into a personal account, applicants can use personal bank statement. 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.

Do applicants need a letter from a licensed tax preparer or CPA?

Yes. If borrowers are qualifying for a bank statement loan, they may be asked to provide a letter from a licensed tax preparer. On a Bank Statement Loan, we are not reviewing tax returns, so we rely on third parties such as a licensed tax professional to verify certain aspects of their business.

Here are some examples of the things commonly requested:

  • Verify the business’s expense ratio (%)
  • Verify the length of time the business has been operational.
  • Verify the ownership percentage of the business
Does a letter from a licensed tax preparer or CPA have to come from the same accountant who prepares the applicant’s tax returns?

No. The letter can come from any licensed tax preparer, accountant, or CPA. The letter must appear on their letterhead, be signed, and be dated. We need to be able to verify the tax professional’s Preparer Tax Identification Number (PTIN) or CPA license number.

Is it okay if the information on tax returns does not match what is provided on a letter from a licensed tax preparer or CPA?

YES. The letter being provided relies on third-party information provided by a licensed tax professional and is not expected to directly match the information seen in the tax returns. Unlike a traditional home loan program, on a Bank Statement Home loan program, the lender does NOT pull a tax return transcript of the applicant’s personal or business returns from the IRS.

Can a borrower whose company pays them in 1099 wages still qualify for a Bank Statement program?

They can but it would be much easier using our 1099 income program. Bank Statement loans were designed for true business owners. So, an independent contractor earning 1099 wages is technically not self-employed. If the employer pays the applicant in 1099 wages, then the only time the applicant is considered self-employed is by the IRS when they file tax returns, and neither of these two programs uses tax returns. If applicants receive 1099 wages, a 1099 Income Program is designed more for this type of income and may end up giving them more income—and even greater buying power than they would with a Bank Statement Loan. The two programs are remarkably similar, in terms of minimum down payment, minimum credit scores, etc.

Can a borrower who owns a 50% share in a business do a Bank Statement Loan?

Yes, but unless the business partner is also qualifying for the same home loan with you, then it would reduce the amount of income by their percentage, which could in turn significantly reduce the amount of house they can afford. For instance, by owning 50% of the business, then the borrower can only use 50% of the income from the bank statement income analysis.

What if a borrower fully owns a business but has a spouse employed with W2s, can the spouse’s income be counted?

Yes. We will calculate the business owner’s income using Bank Statement and the spouse’s income will be calculated with their W2s, pay stubs, and an Employment Verification from their employer.

Do applicants have to sign an IRS Form 4506-C to Qualify for a Bank Statement Loan?

No. IRS Form 4506-C authorizes us to pull a tax return transcript and signing one is not required for a Bank Statement Loan.

Can Co-signers be added to the borrower’s application?

No. Co-signers and applicants who are not occupying the new home are not allowed on a Bank Statement Loan Program.

Can borrowers get a Bank Statement Loan if they have had a Foreclosure, Bankruptcy, or Short Sale?

YES, as long as the bankruptcy, foreclosure, or short sale is completed at least 12 month ago or longer. Depending on the length of time after the certificate of title date, it may affect the minimum down payment on a home.

Can borrowers whose primary income is derived from Cryptocurrency qualify for a Bank Statement Loan?

No. Cryptocurrency deposits cannot be used to qualify for a Bank Statement Only US bank accounts can be used in the income calculation.

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