Bank statement loans qualify self-employed borrowers using 12–24 months of bank deposits instead of tax returns. The lender averages your deposits, applies a 50% expense factor for sole proprietors, and uses the result as your income. Most programs require 10–20% down and a 620+ credit score.
How do bank statement loans work?
The lender totals 12–24 months of bank deposits, subtracts an expense ratio (50% for sole proprietors, less for corps with verified expenses), and uses the net as monthly qualifying income. $20,000/month deposits × 50% = $10,000 qualifying income. See our Bank Statement Loans California hub for details.
Who qualifies?
Self-employed 2+ years with consistent cash flow. Business owners, consultants, contractors, healthcare providers, attorneys, real estate investors — anyone whose tax returns understate income due to legitimate deductions but whose bank clearly shows the money coming in.
Down payment and rates
10–20% down depending on credit and loan size. Rates run 0.5–1.5% above conventional. No PMI. In 2026, expect roughly 7–9% for well-qualified CA borrowers. The rate spread narrows as your credit score and down payment improve.
Personal vs. business bank statements — which is better?
Depends on your structure. Personal statements with a 50% expense factor often work well for sole proprietors with minimal actual expenses. Business statements with a lower verified expense factor can produce higher qualifying income for incorporated businesses. We run both scenarios for every borrower.
Can I use a bank statement loan for an investment property?
Yes. Also consider a DSCR loan — which qualifies based on the property’s rental income rather than your personal income. Often better terms for investment properties.
📞 Call: (800) 239-1103 | Cell: (310) 849-9124
Michael G. DiVita, Broker of Record | CA DRE #01372066 | NMLS #241655
DiVita Home Finance, Inc. | CA DRE #01818285 | NMLS #323700
