The short answer: A bank statement loan qualifies you with 12 or 24 months of bank deposits instead of tax returns. It is a Non-QM product, so terms vary by lender and can cost more. Lenders still must make a good-faith ability-to-repay decision. Gross deposits are not automatically your income, since expenses and transfers get adjusted.
This post is for you if:
- You own a business, freelance, or drive in the gig economy in Las Vegas and your tax returns show less than you earn.
- You were turned down because of write-offs.
- You want to know the real trade-offs before you apply.
Self-employed and not sure where you stand? Tell me how you get paid and I will help you map out the paperwork.
Book a free callWhat is a bank statement loan?
Most mortgages use tax returns to prove income. If you are self-employed, write-offs can shrink your taxable income. A bank statement loan looks at the money that actually moves through your accounts instead. NASB, one lender that offers it, says it reviews 12 or 24 months of deposits to evaluate real cash flow.
This is a Non-QM loan, which means it sits outside the standard qualified mortgage rules. The CFPB says Non-QM loans can be riskier or more expensive. That is not a reason to avoid them. It is a reason to compare.
How do lenders turn deposits into income?
Methods differ by lender. Here is one illustration so you can see the idea. REMN Wholesale totals eligible deposits and divides by 12 or 24. For business accounts, its example applies a 50% expense ratio and your ownership share first. Other lenders use other numbers, and some do not apply an expense ratio to personal statements.
That is why "my deposits are X, so I can borrow Y" is never a safe shortcut. Transfers between your own accounts and unusual large deposits may be excluded or need an explanation.
Is a bank statement loan better than a tax-return loan?
| Tax-return (Fannie or Freddie) | Bank statement (Non-QM) | |
|---|---|---|
| Income proof | Tax returns, usually two years | 12 or 24 months of deposits |
| Write-offs | Reduce your qualifying income | Replaced by an expense factor |
| Rules | Standard agency guidelines | Set by each lender (overlays) |
| Cost | Often lower | Can be higher, so compare Loan Estimates |
If your tax returns support the loan you want, that route is often simpler. Fannie Mae generally looks for a two-year earnings history, with limited exceptions. Freddie Mac has an exception for under two years with related work history. Neither is a one-year free pass.
Want to know which route fits your income? Book a free call and bring your last few statements.
Book a free callWhat do lenders usually require?
Requirements are lender-specific. These examples show the range, and they are not promises.
- NASB lists a 700 minimum credit score and 10% down with mortgage insurance for its bank statement product.
- REMN's reserve schedule starts at 6 months of housing payments for its first loan-size tier.
- REMN sets loan-to-value limits by credit score, occupancy and loan size.
There is no single typical threshold. Ask for the current matrix for your property and credit profile.
What documents should you gather?
- ID and the loan application.
- Every page of consecutive statements for each approved account.
- Business and ownership proof, plus a CPA letter or profit and loss if required.
- Statements for your down payment and reserves.
- The purchase contract, or refinance details.
If you are a 1099 contractor, some lenders offer a separate route using 1099-NEC forms and year-to-date records, and NASB's 1099 program reviews the last 12 months of 1099-NEC income. See my 1099 and tipped income guide and self-employed loan page.
Does ability-to-repay still apply?
Yes. Regulation Z requires a reasonable, good-faith determination that you can repay a covered loan, verified with reliable records. A bank statement loan is not a no-questions loan. Read the written terms for any interest-only period, balloon payment or prepayment penalty before you sign.
Frequently asked questions
How many months of bank statements do I need?
Lenders commonly use 12 or 24 months, depending on the program. Ask which one applies to you.
What credit score do I need?
It depends on the lender. NASB lists 700 for its product, as one example. Confirm the current matrix.
Do I need to put down more money?
Often more than a standard loan. NASB's example is 10% down with mortgage insurance. Terms vary by lender.
Can I use a bank statement loan with 1099 income?
Some lenders have a separate 1099 program that uses 1099-NEC forms plus year-to-date records. Others use bank statements.
Is a bank statement loan a no-doc loan?
No. You still document deposits and assets, and the lender must make a good-faith ability-to-repay decision.
Sources
Last verified October 28, 2026. Programs, limits and fees change, so confirm the current numbers before you rely on them.
- NASB: Bank statement loan
- NASB: 1099 mortgage loan FAQs
- REMN Wholesale: ACCESS bank statement quick guide
- Fannie Mae Selling Guide B3-3.5-01
- Freddie Mac Bulletin 2024-10
- CFPB: Loan application packet
- CFPB: Understand loan types
- 12 CFR 1026.43, ability to repay (eCFR)
- IRS: Form 1099-NEC FAQ
Ready to see what you could qualify for? Book a free call and bring your questions.
Book a free callI am Fabion Medhanie, a retired U.S. Army Captain and mortgage broker in Las Vegas. This is education, not a rate quote or a loan approval. Your loan options depend on your full file.
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