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in San Francisco, CA
Self-employed borrowers in San Francisco have two strong options for mortgage financing. Both Bank Statement Loans and Profit & Loss Statement Loans offer non-QM pathways when traditional income verification doesn't work.
These loan types help business owners, freelancers, and contractors qualify based on actual earnings. The right choice depends on your documentation preferences and financial situation. Rates vary by borrower profile and market conditions.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to verify income. Lenders review deposits to calculate your average monthly earnings. This avoids the need for tax returns or formal profit statements.
This option works well if you have consistent deposits and minimal CPA involvement. The underwriter analyzes your cash flow patterns directly from banking activity. It's popular with gig economy workers and cash-heavy businesses.
Profit & Loss Statement Loans require a CPA-prepared profit and loss statement to document income. This formal accounting approach provides detailed business performance data. Some lenders may also request a balance sheet for complete financial review.
This loan type suits borrowers who maintain professional accounting records. The CPA certification adds credibility to your income claim. It's ideal for established businesses with regular accounting practices already in place.
The main difference lies in documentation style and preparation time. Bank Statement Loans rely on raw transaction data you already have. P&L Loans need professional accounting work, which takes more time and costs money.
Bank statements show actual cash flow without interpretation. P&L statements present organized financial performance with accounting adjustments. Some borrowers find bank statements faster to gather, while others prefer the structured P&L approach.
Cost is another factor to consider carefully. Bank statements just need printing or downloading from your account. A CPA-prepared P&L statement involves professional fees that can range from hundreds to thousands of dollars.
Choose Bank Statement Loans if you want quick documentation without CPA involvement. This works best when you have steady deposits and straightforward business income. It's also smart if you don't currently work with an accountant.
Pick Profit & Loss Statement Loans if you already use a CPA for business accounting. This option makes sense when your bank statements show irregular deposits or complex transactions. It provides cleaner income presentation for complicated business structures.
Both loan types serve self-employed San Francisco borrowers effectively. Your current record-keeping habits should guide your decision. Talk with a mortgage broker to determine which documentation matches your situation best.
Some lenders allow hybrid approaches, but most programs require one method or the other. Your broker can identify lenders with flexible documentation requirements for your specific situation.
Rates are similar for both programs and vary by borrower profile and market conditions. Your credit score, down payment, and property type matter more than documentation method for rate pricing.
Most Bank Statement Loan programs require 12 to 24 months of consecutive statements. The longer period helps lenders see consistent income patterns and seasonal business variations.
The CPA must be licensed and in good standing. Some lenders require the CPA to sign a certification letter confirming they prepared the statement and reviewed your business records.
Bank Statement Loans often close slightly faster since you don't wait for CPA preparation. However, both can close in 30-45 days with responsive documentation and a smooth appraisal process.