A bank statement loan is a non‑QM mortgage that allows borrowers—especially self‑employed Californians—to qualify using bank statements instead of tax returns.
This is ideal when tax write‑offs make taxable income look lower than actual cash flow. According to multiple California lenders, bank statement loans are designed for self‑employed borrowers, gig workers, contractors, and small business owners whose deposits better reflect their true income.
How It Works Instead of W‑2s or full tax returns, lenders review:
• 12–24 months of personal or business bank statements
• Average monthly deposits to calculate qualifying income
• Business expense factor (often 10–50% depending on industry) This approach is highlighted by California lenders as a flexible alternative to traditional mortgages.
A Profit & Loss (P&L) loan is a non‑QM mortgage that allows self‑employed borrowers to qualify using a CPA‑prepared or tax‑preparer‑prepared profit and loss statement, instead of tax returns, W‑2s, or bank statements.
California lenders describe these loans as ideal for business owners, entrepreneurs, and self‑employed professionals whose taxable income doesn’t accurately reflect their real business performance.
How It Works Instead of traditional income documentation, the lender uses:
• A 12‑ or 24‑month P&L statement prepared by a CPA or licensed tax preparer
• Sometimes a balance sheet (varies by lender)
• Business licensing or entity documentation
• A CA licensed tax preparer letter verification that the business is active over 2 years and stable
The VOE Loan is designed for W‑2 employees who want an easier path to homeownership with no income documents required.
Why Borrowers Love It:
• No tax returns, W‑2s, paystubs, or 4506‑T required
• 100% gift funds allowed
• Fast disclosures (typically within 24 hours of a complete file
The program requires a valid, verifiable employer to complete a Verification of Employment (VOE) form confirming the borrower has at least two years of employment and providing basic income details.