Loading
Loading
Self-employed borrowers in Novato face a standard problem: strong income that doesn't show up on tax returns. Business owners write off expenses to minimize tax liability, which makes traditional mortgage qualification nearly impossible.
P&L statement loans solve this by using your business's profit and loss statement instead of tax returns. A CPA prepares a current P&L showing your actual business income. Lenders verify the numbers directly with your accountant.
Profit & Loss Statement Loans in Novato
You need two years of self-employment history in the same business. Credit scores typically start at 660, though some lenders go to 640. Down payment minimums run 15-20% depending on loan amount and property type.
Your CPA must be licensed and willing to verify the P&L with the lender. Most lenders want a P&L covering at least 12-24 months. They'll also pull business bank statements to confirm the income flow matches what the P&L shows.
Local decision guide
Use this guide to connect profit & loss statement loans eligibility, lender expectations, and local market factors before comparing payment options in Novato.
Self-employed borrowers in Novato face a standard problem: strong income that doesn't show up on tax returns. Business owners write off expenses to minimize tax liability, which makes traditional mortgage qualification nearly impossible.
P&L statement loans solve this by using your business's profit and loss statement instead of tax returns. A CPA prepares a current P&L showing your actual business income. Lenders verify the numbers directly with your accountant.
You need two years of self-employment history in the same business. Credit scores typically start at 660, though some lenders go to 640. Down payment minimums run 15-20% depending on loan amount and property type.
This is pure non-QM territory. None of the big retail banks touch P&L loans. You're working with specialty lenders who understand self-employed income. We access 40+ lenders who offer these programs with different overlays.
Rates run 1-2% higher than conventional loans. That premium buys flexibility most W-2 earners don't need. Some lenders cap at $2 million, others go to $3.5 million. A few will finance investment properties using P&L income.
Most CPAs have never prepared a P&L for mortgage purposes. Give them a heads-up early. The format matters — lenders want specific line items and won't accept a basic income statement. Your accountant needs to be responsive when the underwriter calls.
Timing is crucial. Don't wait until you find a house to start the P&L process. Get it prepared and reviewed by a lender first. We've seen deals fall apart because the CPA wouldn't return calls or the P&L format didn't meet lender requirements.
Bank statement loans are the main alternative. They use 12-24 months of business bank deposits instead of a P&L. No CPA needed, but rates can be slightly higher. Bank statement loans work better if your income is consistent but your P&L shows volatility.
1099 loans are cleaner if you have contractor income without massive deductions. Asset depletion works if you have significant liquid assets but low documented income. Each option serves a different profile.
Novato's professional community includes consultants, contractors, and small business owners who maximize tax deductions. These borrowers often earn well but show minimal taxable income. P&L loans are built for exactly this situation.
Marin County property values mean most borrowers need jumbo loan amounts. Not all P&L lenders go above conforming limits. We filter for lenders who handle higher loan amounts and understand the local market's price points.
Most lenders want a P&L dated within 90 days of application. Some accept 120 days. Your CPA prepares it specifically for the mortgage application using current business financials.
Yes. The structure doesn't matter as long as you own at least 25% of the business. Your CPA prepares the P&L based on your ownership percentage of the company's profit.
Always. The lender calls your CPA to confirm they prepared the statement and verify the numbers. Your accountant needs to be available and responsive during underwriting.
You won't qualify with that P&L. Lenders need consistent profit over 12-24 months. Consider bank statement loans instead, which show gross deposits rather than net profit.
Yes. Many borrowers use P&L for self-employment income and traditional documentation for a spouse's W-2 income. This can improve your rate and terms.