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Profit & Loss Statement Loans in Auburn
Auburn's self-employed borrowers face a common problem: strong income but tax returns that don't show it. P&L statement loans solve this by letting a CPA-prepared profit and loss statement document your earnings instead of tax returns.
This loan type works well in Auburn where many borrowers run small businesses, work as contractors, or own rental properties. When your write-offs reduce taxable income below what you actually earn, P&L loans let you qualify based on real cash flow.
You need a CPA to prepare your P&L statement covering at least 12 months of business income. Some lenders accept 24 months of statements for stronger files. Credit minimums typically sit at 660, though some programs go to 640.
Expect 15-20% down for purchases and at least 20% equity for refinances. Most lenders cap loan amounts at $3-4 million. You'll need to show at least two years in business or your current industry to qualify.
P&L statement loans sit in the non-QM space, meaning rates run 1-2% higher than conventional loans. Rates vary by borrower profile and market conditions. The trade-off is qualifying with income documentation that reflects how you actually earn.
Not every lender offers P&L programs, and requirements vary significantly between lenders. Some accept only CPAs, others allow licensed accountants. Shopping across multiple non-QM lenders matters more here than with conventional loans.
The biggest mistake borrowers make is waiting until they're ready to buy before talking to a CPA. Get your P&L prepared before you shop for homes. Most CPAs can turn around a statement in 1-2 weeks, but you don't want to lose a property while waiting.
I see files declined because the P&L shows inconsistent income month to month. Lenders want stability. If your business has seasonal swings, a 24-month P&L shows the pattern better than 12 months. Some borrowers benefit more from bank statement loans when income fluctuates heavily.
Bank statement loans and P&L loans serve similar borrowers but work differently. Bank statement programs calculate income from 12-24 months of deposits. P&L loans use the bottom line your CPA calculates after deducting legitimate business expenses.
Choose P&L loans when your bank deposits include a lot of non-income items like loans or transfers. Choose bank statements when you don't want to pay a CPA or when your deposits clearly show strong income. Both programs typically have similar rates and down payment requirements.
Auburn borrowers often own businesses serving the surrounding Placer County area—contractors, property managers, real estate professionals. Many have income that varies seasonally or write off vehicle expenses, home office costs, and equipment that reduce tax returns artificially.
Property values in Auburn range from affordable starter homes to high-end estates in the surrounding hills. P&L loans work for all price points up to the program limits. The key is matching your documented business income to the property you're buying.
Your accountant needs an active CPA license in California. Some lenders accept EAs or licensed accountants, but CPA-prepared statements qualify with more lenders.
Yes, though DSCR loans often work better for investment properties since they qualify based on the property's rental income instead of your business income.
You need two years in your current industry, not necessarily the same business entity. A contractor who worked W-2 then went independent can combine that experience.
Enough to support a 43-50% debt-to-income ratio after accounting for the mortgage payment. Lenders calculate this using your monthly net profit from the P&L statement.
Yes, most lenders allow combining self-employment income verified by P&L with a co-borrower's W-2 income verified through paystubs and tax returns.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.