Question 1

Does my CPA need special licensing to prepare a P&L for mortgage underwriting?

Accepted Answer

Your CPA must hold an active license in any U.S. state and sign the statement with their license number. Some lenders accept enrolled agents, but most require CPA preparation specifically.

Question 2

Can I use a P&L loan if I've been self-employed for 18 months?

Accepted Answer

Most lenders require 24 months of self-employment history for P&L programs. With 18 months, bank statement loans offer better approval odds and similar pricing.

Question 3

How do lenders calculate my income from the profit and loss statement?

Accepted Answer

They average your net profit over the P&L period, usually 12 or 24 months. Some lenders add back depreciation and one-time expenses if your CPA documents them properly.

Question 4

What happens if my P&L shows more income than my tax returns?

Accepted Answer

Underwriters will ask your CPA to reconcile the difference in writing. Legitimate business expenses and timing differences explain most gaps without causing issues.

Question 5

Do P&L statement loans have prepayment penalties in California?

Accepted Answer

Some non-QM lenders include prepayment penalties, typically 3 years declining. We prioritize lenders without penalties when your scenario allows it.

Question 6

Can I combine a P&L loan with gift funds for down payment?

Accepted Answer

Yes, most lenders accept gift funds from family members with proper documentation. You typically need to contribute 5% of your own funds with the remainder as gift.

P&L Statement Loans in Torrance: Income Verification That Matches How You Actually Earn