Non-QM Income Program

Bank Statement Loans:
Qualify on Cash Flow, Not Tax Returns

Your deposits tell the real story. Bank statement loans use 12 or 24 months of deposits to calculate qualifying income, no tax returns, no W-2s, no Schedule C net income.

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✓ 12 or 24 month programs✓ Personal or business statements✓ No tax returns✓ 10% down primary

The Basics

What Is a Bank Statement Loan?

A bank statement loan qualifies you based on cash deposits into your bank account, not your tax return income. Instead of W-2s and Schedule C, you provide 12 or 24 months of personal or business bank statements. The lender calculates your qualifying income from average monthly deposits, often applying an expense ratio to business accounts.

This is the most widely used Non-QM program because it directly addresses the self-employed borrower's core problem: tax write-offs reduce taxable income, but don't reduce real cash flow. A business owner who deposits $25,000/month but shows $60,000 net on their Schedule C qualifies on actual cash flow, not the IRS's version of it.

Months of statements (minimum)

620+

Typical min. credit score

10%

Minimum down (primary)

$3M+

Loan amounts available

Income Calculation

How Bank Statement Income Is Calculated

Income calculation differs between personal and business bank statements. Lenders apply different expense ratios depending on account type and sometimes industry.

Personal Bank Statements

All deposits are counted as income. Average monthly deposits over the statement period = qualifying monthly income. Clean and straightforward, no expense ratio applied.

Example: $240,000 in deposits over 12 months = $20,000/month qualifying income.

Business Bank Statements

An expense ratio is applied to account for business operating costs. Common ratios: 50% for most businesses, up to 75% for higher-margin businesses. The remaining percentage is your qualifying income.

Example: $300,000 in deposits over 12 months × 50% expense ratio = $12,500/month qualifying income.

12 months vs. 24 months, what's the difference?

24-month bank statement programs typically offer better rates and higher loan amounts because they provide more income stability evidence. 12-month programs are available but may carry slightly higher rates or stricter LTV limits. If your income has grown recently, 12 months may actually show higher qualifying income, Mortgages by Channing will run both calculations and show you which is better for your file.

Requirements

Bank Statement Loan Requirements

Requirement	Typical Standard
Credit Score	620+ (better pricing at 700+)
Statements Required	12 or 24 months personal or business
Self-Employment History	2 years in same business (verified)
Min. Down (Primary)	10% (at 680+ credit)
Min. Down (Investment)	20 to 25%
Max Loan Amount	Up to $3M+ on some programs
Property Types	Primary, second home, investment
Tax Returns Required	No

Want To Know What This Looks Like On Your Numbers?

Every scenario is different. A soft credit check tells you where you actually stand, and nothing hits your report until you decide to move forward.

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Comparison

Bank Statement vs. Full Doc Loan

The right choice depends on whether your tax return income is sufficient to qualify conventionally. See the full comparison →

Factor	Bank Statement	Full Doc (Conventional)
Income Source	Avg. monthly deposits	Tax return net income
Tax Returns Required	No	Yes, 2 years
Ideal For	Heavy write-off self-employed	W-2 or clean tax return income
Min. Down Payment	10%	3 to 5%
Rate vs. Conventional	+0.50% to 1.50% premium	Baseline
Loan Amount	Up to $3M+	Up to $806,500 (conforming)

Common Questions

Bank Statement Loan FAQ

Typically yes. Bank statement loans are designed for self-employed borrowers whose business write-offs reduce their taxable income below what's needed to qualify conventionally. Most lenders require 2 years of self-employment history in the same business. W-2 employees with supplemental income sometimes qualify through hybrid programs, but the core product is built for the self-employed.

You can use either or both. Many lenders let you choose, personal statements (no expense ratio) vs. business statements (with expense ratio). If your personal account shows strong consistent deposits, personal statements often produce higher qualifying income. Mortgages by Channing will run both calculations and use whichever produces the better outcome for your file.

Lenders average the deposits over the full statement period. Seasonal or variable income isn't disqualifying, it just produces an average. However, if one or two months have unusually large deposits (e.g., a property sale, a lawsuit settlement), the lender may exclude those from the average. Consistent operating deposits matter more than spikes.

Yes. Bank statement loans are available for rate-and-term refinances and cash-out refinances. Cash-out bank statement refinances are particularly useful for self-employed borrowers who have built equity and want to access it without documenting income through tax returns.

Typically 0.50% to 1.50% above comparable conventional rates, depending on credit score, LTV, loan amount, and the specific lender. A borrower with a 740 credit score at 75% LTV on a $500,000 bank statement loan will price much better than a 640 score at 90% LTV. Mortgages by Channing shops multiple Non-QM lenders to find the most competitive pricing for your specific file.

Some bank statement loan programs include a prepayment penalty, typically a 3-year or 5-year step-down structure (e.g., 3/2/1 means 3% penalty in year 1, 2% in year 2, 1% in year 3). Not all programs have them, and paying a point or two at closing can sometimes buy out the penalty. Mortgages by Channing will disclose this clearly upfront so you can factor it into your decision.

Ready to See What You Qualify For?

Tell Mortgages by Channing your monthly deposits, credit score, and purchase price. We'll calculate your qualifying income and match you to the best bank statement program available.

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The Application

Apply From Your Phone In Fifteen Minutes

If your income does not fit in a W-2 box, this is the path. The application runs on your phone and reaches me the minute you submit it.

Starts with a soft credit check, so your score is never touched
Bank statements, 1099s or assets, we tell you which one fits you
Upload documents with your phone camera, no scanner needed
You hear back from Channing, not from a call center queue

If the numbers say wait, I'll tell you that too, and then we make a plan to fix whatever is in the way.

Start My Non-QM Pre-Approval Call 337-476-2623

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Complete Your Application

Five short steps. Most people finish in about fifteen minutes.

Tell us what you're looking for
We check which income path fits
Upload your documents

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Find Out Where You
Actually Stand

A soft credit check tells you what you qualify for before anyone pulls hard credit. If the numbers say wait, I will tell you that too, and then we make a plan to fix whatever is in the way.