Bank statements
For business owners and other self-employed borrowers. The lender works out a monthly income from the deposits in your personal or business bank statements instead of your tax returns.
Bank statement loans
Alternative documentation loans
Other ways to show your income.
If your tax returns do not show your real income, there are programs that look at bank statements or assets instead. Here are the documentation options for business owners, contractors and others, and how each one works.
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Pick the one closest to you. A few short questions follow, and a licensed loan officer gets back to you.
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Fidelity Residential · NMLS #103098 · Equal Housing Lender
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- Many ways to documentWe compare programs to find the one that fits how you earn.
- Apply online or by phoneStart a quote, apply online or call 732-686-9999.
The basics
What alternative documentation means
Being self-employed does not mean you cannot get home financing.
Most home loans prove income with pay stubs, W-2 forms and tax returns. Alternative documentation programs prove it another way: with bank statements, 1099 forms, a profit and loss statement, a form your employer completes, or your savings and investments.
These loans are not sold to Fannie Mae or Freddie Mac, so each program sets its own rules. Your income is still verified, and for a home you live in the lender must still make a good-faith decision that you can repay the loan.
What every option still checks
- Your credit and how you have paid for housing
- The money for the down payment, closing costs and savings after closing
- The home’s value, through an appraisal
- Your ability to repay, through your debts compared with your income or, on some asset programs, your assets after closing
Your options
The documentation options
Which one fits depends on how you earn, how your money moves, and the home you want to buy or refinance.
1099 income
For independent contractors and commission earners paid on 1099 forms. The lender uses the forms, takes off a standard allowance for work expenses, and checks your earnings so far this year and the IRS record of your 1099s.
Profit and loss statement
For business owners whose CPA or licensed tax professional prepares and signs a profit and loss statement for the business. The net profit is the income, and a few recent business bank statements are usually requested too.
Employer verification
For salaried or hourly employees. Your employer completes a written verification of your job and pay and sends it straight to the lender, in place of pay stubs, W-2 forms and tax returns. The job is confirmed again before closing. Mainly for a home you live in.
Asset-based loans
For borrowers with substantial savings and investments. You show verified assets instead of pay stubs or tax returns, and they stay in your accounts. The home is the collateral, as with any mortgage.
Asset-based loansOutside the standard rules
For borrowers who document income the usual way but fall outside agency rules: for example higher debts compared with income, a recently started business, a credit event too recent for agency loans, or a condominium the agencies will not finance. Some residency statuses are eligible.
For real estate investors
Rental-income (DSCR) loans
A loan on a rental property qualified on the property’s own rent instead of your personal income. No tax returns or pay stubs; credit, assets and the appraisal are still checked. For business purposes only.
The lender compares the expected rent with the property’s full monthly payment, including taxes, insurance and any association dues. You sign a statement that the loan is for business purposes and that no one on the loan will live in the property.
See how DSCR loans work.
Often a fit when
- The property’s rent is the clearest picture of what it can carry
- You hold title in your own name or in a limited liability company
- You already own rentals; most programs want some landlord experience
Business purpose investor loans are for investment property only. See all investment property loans.
Compare
The options at a glance
| Option | Often used by | What shows the income |
|---|---|---|
| Bank statements | Business owners and other self-employed borrowers | Deposits in personal or business bank statements |
| 1099 income | Independent contractors and commission earners | 1099 forms, with earnings so far this year |
| Profit and loss | Business owners with a CPA or licensed tax professional | A profit and loss statement the professional prepares and signs |
| Employer verification | Salaried and hourly employees | A written verification your employer sends to the lender |
| Asset-based | Borrowers with substantial savings and investments | Verified balances in savings, investment and retirement accounts |
| Outside the standard rules | Borrowers just outside agency rules | Pay stubs and W-2 forms, or tax returns, as usual |
| Rental-income (DSCR) | Real estate investors, for business purposes only | The property’s rent, not your personal income |
How it works
The steps to an alternative documentation loan
Talk about how you earn
Your work or business, how you are paid, the accounts you keep, and the home you want to buy or refinance.
Choose the documentation
A loan officer matches the way you document income to a program whose rules fit your file.
Apply and document
The documents for your option, plus statements for the down payment, closing costs and savings, and photo identification.
Underwriting and closing
An underwriter checks the file against the program’s rules and the appraisal. You review your closing disclosure and sign.
Questions
Common questions about alternative documentation
Is my income still verified?
Yes. Each option verifies income or assets in its own way: complete statements, IRS records of 1099 forms, a signed statement from a tax professional, or a form sent by your employer straight to the lender. Credit, savings and the home’s value are checked as on any mortgage.
Can a co-borrower with a regular paycheck apply with me?
Often, yes. Many programs let a co-borrower’s wages, documented the usual way, be added to your bank statement or 1099 income. A loan officer can check how your program combines them.
Can I use these options for a second home or a rental?
Many bank statement, 1099 and profit and loss programs allow a second home, and some allow a rental property. Employer verification is mainly for a home you live in. Investors buying a rental can also look at DSCR loans.
I do not have a regular income. Is there an option for me?
Bank statement, 1099 and profit and loss loans are for people who are working. If you have substantial savings and investments, an asset-based loan may fit instead.
Do you lend in my state?
Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Not sure which option fits?
Get a quote, apply online, or talk it through with a licensed loan officer.
Business purpose investor loans are for investment property only.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.