Profit and Loss Mortgage Loans for Self-Employed Borrowers
Profit & Loss Only mortgage loans allow brokers to qualify self-employed borrowers using a prepared profit and loss statement instead of bank statements or a full tax return analysis. This can create a cleaner documentation path for borrowers whose income is not best reflected through traditional qualification methods.
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P&L Only
About program
P&L Only loans are often the cleanest solution when a self-employed borrower's income can be documented more clearly through a professionally prepared Profit & Loss statement. This type of self-employed mortgage solution can be especially valuable when bank statements or tax returns are not the strongest qualification tool.
Key features
- No tradeline requirement w/ 3 credit scores
- No bank statements
- Non-perm up to 80% LTV
- Unlimited cash-in-hand
- Cash-out used for reserves
- SFR, condotels, condos, studios, 2-4
- Loan amounts up to $3m
- CPA, EA, CTEC, PTIN
Required to Disclose
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
12/24 months P&L prepared and signed by a CPA/Tax Preparer.
Required to Underwrite
(in addition to above)
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
12/24 months P&L prepared and signed by a CPA/Tax Preparer.
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FAQ
What is a P&L Only loan?
A P&L Only loan allows self-employed borrowers to qualify using a professionally prepared Profit & Loss statement instead of bank statements or tax return income analysis. It can be a cleaner documentation path for the right borrower scenario.
When is a P&L Only loan the best fit for a borrower?
P&L Only loans are often a strong fit when a prepared Profit & Loss statement provides a clearer qualification path than bank statements or tax returns. They can be an effective form of mortgage financing for self-employed borrowers who want a simpler documentation strategy.
Does a borrower need bank statements for a P&L mortgage loan?
No. A true P&L Only loan means bank statements are not required for income qualification. This can simplify the documentation process for self-employed borrowers whose deposits may be difficult to analyze or explain.
Who can prepare the P&L statement?
The Profit & Loss statement must be prepared by a CPA, EA, PTIN holder, or CTEC Registered Tax Preparer. Using an approved preparer helps ensure the income analysis meets profit and loss loan requirements and supports a smoother underwriting process.
How is a P&L Only loan different from a bank statement loan?
A Bank Statement Loan uses deposit history to calculate qualifying income, while a P&L Only loan relies on a professionally prepared Profit & Loss statement. The better option depends on which documentation provides the clearest income story.
What helps a P&L Only submission be easier to approve?
The strongest submissions include a complete P&L prepared by an approved professional, consistent borrower documentation, and a clear income story. Files typically move more efficiently when the documentation matches the borrower's situation.
Can P&L income be combined with other income sources for qualification?
Yes. P&L income may be combined with eligible documented income sources, such as W-2 income, when program guidelines are met. This can provide additional flexibility for self-employed borrowers with multiple income streams.
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