Curious about what the requirements are for a Profit and Loss Statement Mortgage – here’s the Run Down.  The Profit & Loss Statement Mortgage is ideal for self-employed clients who do not want to provide personal and business tax returns, among reams of other income documentation.

The minimum eligibility requirement for the program is to be self-employed, with ownership in the same business for 2+ years.  Currently, the minimum required credit score is 680.  The client will be asked to provide the prior year’s Profit and Loss Statement.  The current year-to-date Profit and Loss Statement is also required.  The client will also be asked to provide two most recent business bank statements are required.

In addition to business bank statements, personal two months bank statements will be required.  For a purchase transaction, the borrower will need to show all funds needed close.  On all transaction types (purchase and refinance) the client will also need to show reserve assets.  The reserves vary from 3-9 months of mortgage payments that need to be in the account.  Generally, the account type can be checking, savings, or brokerage account.  Retirement accounts are also eligible for reserves.

The Profit & Loss Statement Mortgage is eligible for a purchase transaction or a refinance.  Amazingly, it can be used for a primary home, a secondary home, and even an investment property.  The guidelines vary somewhat depending on property type, transaction type, and loan amount.  Currently, on a purchase of a primary home with a 740+ credit score a down payment as low as 25% can be utilized.

A client can take advantage of the Profit and Loss Statement mortgage for conventional and jumbo loan amounts up to $3,000,000.  With the limited documentation required – these loans can generally close in 30 days.  The Profit & Loss Statement Mortgage is a fantastic option for all well-qualified self-employed borrowers.