Self-employed Texans have a familiar problem: their tax returns are optimized for taxes, not for mortgage qualifying. Every legitimate write-off reduces adjusted gross income — which reduces what a traditional lender will use to qualify you.
Bank statement loans solve this by using deposits, not tax returns, as the income source. We look at 12 or 24 months of business or personal statements, average the deposits, and apply an expense factor.
The typical structure: 24 months of business statements, average deposits × (1 - expense factor) = qualifying income. Expense factors vary by business type; a service business (consultant, agent, therapist) might use 50%, while a retail business with real cost-of-goods might use higher.
Requirements: usually 2 years of self-employment history, 660+ credit, and a down payment of 10-20%. Reserves of 3-6 months are typical.
This isn't a stated-income loan. Deposits have to be real, consistent, and match the business you're claiming. But if the deposits are there, we can build a real qualifying income even when your Schedule C shows a loss.
Best use cases: real estate professionals, medical practices, consultants, franchise owners, and anyone whose Schedule C net income doesn't reflect the money moving through the business.