I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. Self-employed mortgage is a core specialty of mine — I’ve run every qualification path below for California clients and know exactly which one fits which income structure. Call (800) 239-1103.
Self-employed borrowers in California have four main pathways to mortgage approval when conventional tax-return-based qualification does not work. Here is a breakdown of each, who it works best for, and what you need to apply.
1. Bank Statement Loans
Best for: Business owners with consistent monthly deposits who write off heavily on their taxes.
The lender collects 12 or 24 months of business or personal bank statements and averages your deposits. For business accounts, an expense factor (typically 50%) is applied to account for overhead. For personal accounts, full deposits are often used.
What you need: 12–24 months bank statements, minimum 620 FICO, 10%+ down payment, 2 years self-employed (some lenders allow 1 year).
Full bank statement loan guide
2. Profit and Loss (P&L) Only Loans
Best for: Business owners with clean books and a CPA who want the simplest possible documentation.
A CPA-prepared P&L statement covering 12 or 24 months replaces both tax returns and bank statements as your income documentation. The lender qualifies you on the net profit shown on the P&L.
What you need: CPA-prepared and signed P&L, minimum 620 FICO, 10–15%+ down payment.
3. 1099 Loans
Best for: Independent contractors, real estate agents, consultants, healthcare professionals, and anyone with commission or contract income on Form 1099.
The lender uses your gross 1099 earnings — before any deductions — to calculate qualifying income. For earners who write off aggressively, the difference between gross 1099 income and net taxable income can be enormous.
What you need: 1–2 years of 1099 forms, minimum 620 FICO, 10%+ down payment.
4. Asset Depletion Loans
Best for: High net worth borrowers with substantial investments or savings but lower current income.
The lender converts your liquid assets into a monthly qualifying income by dividing eligible assets by the loan term. No employment income required.
Example: $3 million in eligible assets divided by 360 months = $8,333 per month qualifying income.
What you need: 3 months of investment/bank statements, minimum 680 FICO, 20%+ down payment.
Full asset depletion loan guide
Which Path Is Right for You?
The answer depends on your specific income structure. Call me and I’ll run your scenario through all four programs and tell you which one gives you the best qualifying income and terms — usually in the same conversation.
Frequently Asked Questions — Self-Employed Mortgage California
What is the easiest way for self-employed borrowers to qualify for a California mortgage?
The easiest path depends on your income documentation. Bank statement loans are the most commonly used — they require 12–24 months of business or personal bank statements and apply an expense ratio to your deposits to calculate qualifying income. For borrowers with a clean CPA-prepared P&L, P&L-only loans can be even simpler. 1099-only loans work best for contractors with consistent 1099 income. Asset depletion works for high-net-worth borrowers with substantial liquid assets. In each case, the key is finding the program that makes your actual financial picture look best on paper — which is exactly what a broker who specializes in self-employed lending does.
Do I need 2 years of tax returns to get a mortgage if I’m self-employed in California?
Not necessarily. Bank statement loans, P&L loans, 1099 loans, and asset depletion loans all qualify income without using federal tax returns. These are called non-QM (non-qualified mortgage) programs and are widely available from lenders who specialize in self-employed borrowers. Conventional (Fannie/Freddie) loans do require 2 years of tax returns, which is why self-employed borrowers with high write-offs often qualify for less than they should through conventional channels. Non-QM programs solve this by looking at gross cash flow rather than taxable income.
How much down payment does a self-employed borrower need in California?
Non-QM programs for self-employed borrowers typically require 10–20% down depending on the loan amount, credit score, and program type. Bank statement and 1099 loans commonly start at 10% down with a 680+ credit score, and 15% with a 620 score. P&L loans may require 15–20%. Asset depletion programs typically require 20% or more. On conforming loan amounts for a well-qualified self-employed borrower, some programs allow as little as 10% down. The higher your credit score and the stronger your cash flow documentation, the lower the down payment requirement.
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
