Use the most recent 12 or 24-month business or personal bank statement average deposits to qualify for your next Florida Mortgage!

Personal Bank Statements

If the money deposited into your account came from a business account you can use 100% of the deposits. If the money came directly from sales before any expenses the lender will assign an expense ratio to your business depending on the industry you work in.

12- or 24-month Bank Statement Mortgage lenders (personal and/or business) Requirements:

Excessive NSFs on the bank statements – Let us know at times we have had lenders that disregard. 
The bank statements should show a trend of ending balance that are stable over the 12-or 24- month period.
 Large deposits inconsistent with history must be documented as business income.
 Net deposits must not reflect any other income sources already taken into consideration (i.e. deduct SS payments,
W-2 wage earnings, etc., that have already been used for income calculation).
When the borrower is an inter vivos trust, personal bank statements in name of the trust and a copy of the trust are allowed for qualification for all bank statement programs.
4506-C, tax transcripts, and/or tax returns are not required for all bank statement programs.
Self-Employed Borrowers – Personal and Business bank Statement combined:
If personal and business bank activity are combined in one bank account, the borrower is to provide the most recent 24- or 12-month consecutive bank statements from the same account.
o Standard expense factor applies; 50% expense factor.
o If the type of business operates more efficiently or typically has a materially different expense factor (lower than the  standard expense factor), then the expense factor per either a CPA/CTEC/EA letter or P&L may be applied.
o The underwriter may use an expense factor higher than the standard 50% when the analysis of the bank statements reflects higher expenses.
o The minimum expense factor with CPA letter or P&L is 10%.
 When a CPA or tax preparer produced statement is provided, apply the stated expense factor to calculate the qualifying income (subject to the minimum expense factors). Provide either of the following:
 A CPA/CTEC/EA produced a written statement/letter specifying the actual expense ratio of the business (including cost of goods sold and all other business expenses) based on the most recent year’s filed tax returns. Such statement shall not include unacceptable disclaimer or exculpatory language regarding its preparation; or,
 A CPA/CTEC/EA produced P&L statement that has been reviewed by the CPA/CTEC/EA, the CPA/CTEC/EA states they have reviewed the P&L in writing, and the P&L and accompanying statement do not have unacceptable disclaimer or exculpatory language regarding its preparation.
 The expense factor per the P&L or CPA/CTEC/EA produced statement must be reasonable. The annual deposits on the bank statements must be at least 75% of the gross receipts per the P&L.

Self-Employed Borrowers – Personal and Business bank statement Separated:

o If the borrower maintains separate bank accounts for personal and business, only personal bank statements are used for qualifying.
o The borrower is to provide the most recent 24 or 12 months consecutive personal bank statements and 2 months business bank statements (to support the borrower does maintain separate accounts, and to show business cash flows in order to utilize 100% of business-related deposits in personal account).
o The deposits are analyzed and averaged to determine monthly income.
 No expense factors
 Deposits to a personal account from sources other than self-employment is not to be included.

Business Bank Statement Only:

o Business bank statements must be operating account(s) reflecting normal business expenses.
o If only using business bank statements, borrower is to provide the most recent 12- or 24-months consecutive business bank statements. Standard expense factor applies; 50% expense factor.
o If the type of business operates more efficiently or typically has a materially different expense factor (lower than 50%), then the expense factor per either a CPA/CTEC/EA letter or P&L may be applied.
o The underwriter may use an expense factor higher than the standard 50% when the analysis of the bank statements reflects higher expenses.
o The minimum expense factor with a CPA letter or P&L is 20%.
 When a CPA or tax preparer-produced statement is provided, apply the stated expense factor to calculate the qualifying income. Provide either of the following:
 A CPA/CTEC/EA produced a written statement specifying the actual expense ratio of the business
(including cost of goods sold and all other business expenses) based on the most recent year’s filed
tax returns. Such statement shall not include unacceptable disclaimer or exculpatory language
regarding its preparation; or,
 A CPA/CTEC/EA produced P&L statement that has been reviewed by the CPA/CTEC/EA, the
CPA/CTEC/EA states they have reviewed the P&L in writing, and the P&L and accompanying
statement do not have an unacceptable disclaimer or exculpatory language regarding its preparation.
 The expense factor per the P&L or CPA/CTEC/EA produced statement must be reasonable. The annual
Deposit on the bank statements must be at least 75% of the gross receipts per the P&L.

12 months 1099 Contractor:

o A borrower who is a “1099 contractor” may be considered self-employed for this program with confirmation from a CPA that the borrower is a 1099 contractor and files Schedule C or Schedule E with the IRS (personal tax returns).
Borrowers cannot have ownership of 1099 Payor’s business.
o Most recent one (1) year IRS Form 1099(s) from employer(s). The borrower must have a 2-year history of 1099
employment.
o Current paystub or bank statement deposit for each 1099 source utilized for qualification (e.g. if borrower provided
1099 forms from five (5) separate sources, then a separate paystub/bank statement deposit must be provided from
each of the five (5) 1099 sources to support the current receipt).
o Third party documentation (CPA/CTEC/EA) supporting a 2-year employment history when 1-year 1099 used.
o Total 1099 income (-) 10% expense factor / 12 months = Qualifying Income
o 1099 Income that is not supported by documentation of current receipt cannot be used for qualification.
o Signed 4506-C and tax transcripts are required. Profit and Loss (P&L) Program:
o At least one of the borrowers must be self-employed for at least 2 years (25% or greater ownership) to qualify for this
program.
o 4506-C, tax transcripts and/or tax returns are not required for the P&L program.
o The minimum expense factor with a P&L is 20% for the service business, 40% for the product business.
 Service Business: Offer services such as Accounting, Consulting, Counseling, Financial Planning, Insurance, and Therapy. The minimum expense factor with a P&L is 10%.
 Product Business: Sell goods such as Contracting or Construction, Food Services, Manufacturing, Restaurants, and Retail. The minimum expense factor with a P&L is TBD%.
o 2 years active business license is required, unless w2 for the same line of work is provided. 
o A signed letter from the CPA, CTEC or EA on their business letterhead showing the address, phone number, and license number is required with the following information:
 CPA/CTEC/EA confirm they have prepared the most recent 2 years of business tax return filing; and,
 The business name, borrower’s name, and percentage of business ownership by the borrower.
o CPA/CTEC/EA signed/prepared Profit and Loss Statement(s) covering the most recent 12-month period.
o A gap P&L covering the period between the end of the 12-month P&L and the application required when the gap is greater than three
(3) months.
o Income from co-borrowers who are W2 wage earners is to be documented with the most recent W2 and paystub.