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Profit & Loss Statement Loans in San Diego
San Diego's economy runs on entrepreneurship. From biotech consultants in La Jolla to contractors in Chula Vista, self-employed pros need mortgages that reflect real earnings.
P&L loans let you qualify using CPA-prepared profit and loss statements instead of tax returns. This works when your tax write-offs make 1040s look weak.
Most San Diego borrowers using P&L loans are business owners who maximize deductions. Your accountant saves you money at tax time, but those savings hurt conventional loan applications.
This loan type bridges the gap between actual income and what your tax returns show. It's designed for borrowers whose businesses perform better than their 1040s suggest.
You need 12-24 months of business operation under the same ownership structure. Brand new LLCs don't qualify, but established businesses do.
Your CPA prepares a profit and loss statement covering the most recent 12 or 24 months. That statement becomes your income documentation.
Credit scores typically start at 660, though some lenders go to 640. Expect 15-20% down for primary residences, 25% for investment properties.
Debt-to-income ratios run up to 50% depending on credit strength and reserves. Lenders want 6-12 months of payments in the bank after closing.
P&L loans come from non-QM lenders, not conventional banks. Rates run 1-2% above conforming loans because these programs carry more underwriting risk.
Not all lenders accept every business structure. Some prefer sole proprietors and single-member LLCs. Others handle partnerships and S-corps.
Your CPA's credentials matter here. Lenders want licensed CPAs or EAs preparing statements, not bookkeepers. The preparer signs and dates the P&L.
Shopping across lenders matters because P&L programs vary widely. One lender might need 24 months where another accepts 12. Rate spreads can hit 0.5% between competing offers.
Most San Diego borrowers discover P&L loans after conventional denial. They show strong bank deposits but weak tax returns. That's the exact use case for this product.
Your CPA needs to understand mortgage requirements before preparing the statement. We see deals stall when P&Ls lack required details or use non-standard formatting.
Business owners often qualify for more house using P&L versus bank statement loans. P&Ls show net income clearly, while bank statement programs use deposit averages that include transfers.
The trade-off is documentation burden. You'll provide business licenses, articles of incorporation, and proof your CPA is licensed. More paperwork than bank statement loans but cleaner income calculation.
Bank statement loans use deposits to calculate income. P&L loans use net profit from CPA statements. Choose bank statements if your deposits look stronger than your profit margin.
1099 loans work for independent contractors who receive 1099 forms. P&L loans work for business owners who file Schedule C or operate LLCs. Different documentation paths.
Asset depletion loans ignore income entirely and qualify you based on liquid assets. Consider that route if your business shows losses but you have significant cash or investments.
DSCR loans work for investment properties based on rental income, not personal earnings. If you're buying San Diego rental property, DSCR often beats P&L loans for approval ease.
San Diego's median home prices push many deals into jumbo territory. P&L loans handle jumbo amounts, but expect higher down payments above $1.5M purchase prices.
Self-employed borrowers here often carry multiple income streams. Your P&L should reflect your primary business, but lenders may consider secondary income with additional documentation.
Coastal markets see higher appraisal scrutiny. Your business income needs to support the payment comfortably because lenders won't stretch ratios in premium-priced neighborhoods.
Plan for 45-60 day closings. P&L loans need CPA coordination and extra underwriting review. San Diego's competitive market rewards pre-approval, so start documentation early.
Your CPA needs an active license or EA credential. Most lenders require the preparer's license number on the statement itself.
Yes, but expect 25-30% down and slightly higher rates. DSCR loans often work better for pure rental investments.
P&L loans use net business income, not W-2 salary. Low salary with strong profit works perfectly for this program.
Lenders want statements covering periods ending within 90 days of application. Older statements won't meet underwriting requirements.
You need 12-24 months operating history under current ownership. Brand new entities don't qualify regardless of owner experience.
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.