Question 1

Can I use my own P&L or does it need CPA preparation?

Accepted Answer

Lenders require CPA preparation by a licensed, independent accountant. Self-prepared statements don't meet documentation standards for mortgage qualification.

Question 2

What if my P&L shows income but my tax returns show a loss?

Accepted Answer

P&L loans are designed for this scenario. Lenders use the P&L income calculation and don't penalize tax losses from legitimate business write-offs.

Question 3

How do lenders calculate my qualifying income from P&L statements?

Accepted Answer

Most average your net profit over 12-24 months, then add back non-cash expenses like depreciation. Calculation methods vary significantly between lenders.

Question 4

Do P&L loans work for home purchases or just refinances?

Accepted Answer

Both. You can use P&L documentation for purchases, cash-out refinances, and rate-term refinances on primary homes, second homes, and investment properties.

Question 5

What credit score do I need for a P&L statement loan?

Accepted Answer

Most lenders require 640 minimum. Scores above 700 unlock better pricing and more flexible debt-to-income allowances for self-employed borrowers.

Question 6

Can I count cryptocurrency assets toward my down payment?

Accepted Answer

Yes. Some non-QM lenders now accept verified crypto holdings for reserves and down payment funds when properly documented through approved platforms.

P&L Statement Loans for Self-Employed Borrowers in South San Francisco