Texas Bank Statement+No Tax Return Mortgage Lenders

LOAN AMOUNTS – TEXAS NO TAX RETURN MORTGAGE LENDERS:

● Minimum loan amount $100,000 RESERVES: ● 6 months required above 85% LTV ● 6 months required on 12 Mo Cash Flow Product ● See loans > $1M for additional info 

GENERAL TEXAS NO TAX RETURN MORTGAGE LENDERS LOAN TERMS: 

  • 30 Year Fixed  and 5 year ARM, 7 year ARM options
  • No Pre-payment penalty 
  • Floor = Start rate 
  • Caps are 2/2/5 (2% initial change cap / 2% annual cap / 5% lifetime cap) 
  • Index – 1 year libor 
  • All loans require impound for tax and insurance PROPERTY TYPES: 
  • SFRs, condos, townhouses, 2-4 units (no rural properties < $200,000) 
  • Property must show “pride of ownership” DEBT TO INCOME RATIO: 
  • 50% max DTI (up to 55% case by case) 
  • See guidelines for residual income calculations * Requires 0x30 mortgage payment history last 12 months. Full Doc Only 
  • Minimum interest rate: 4.250% ARM 4.625% fixed

INCOME DOCUMENTATION FOR TEXAS NO TAX RETURN MORTGAGE LENDERS: 

  • Full Doc – 2 year (W-2 & paystubs, 1040s, K1’s) 
  • Full Doc – 1 year (W-2 and Current YTD paystub, K1’s) 
  • Full Doc – 1 year (One year Tax Return and YTD P&L Self Empl) 
  • Alt Doc – 12 or 24 months business or personal bank stmts (Self Empl only), Full Doc income with lease agreements, ok (rental income qualified by lease agreements) 
  • Asset Xpress – 100% of amount needed to amortize loan plus monthly debts for 60 months, max 80% LTV to $1.0M; Max 75% LTV to $1.5M 
  • Asset Assist – Assets divided by 120 is added to income. $1.5M max loan amount to 75% LTV, Max 80% LTV to $1M 
  • ALT Doc—3-month Texas Bank Statement (24-month CPA compiled and signed P&L statement supported by 3-months bank stmts)
  • ALT Doc—Profit and Loss (P&L) only. 24-month P&L compiled and signed by CPA. CPA must also attest to filing tax returns for borrower for 24-months. 
  • ALT Doc—VOE only

DOWN PAYMENT REQUIREMENTS FOR TEXAS NO TAX RETURN MORTGAGE LENDERS: 

  • All down payment funds must be verified prior to drawing loan documents 
  • Secondary Financing 80% Max LTV/90% Max CLTV 

TAX LIENS, JUDGMENT REQUIREMENTS FOR NO  TAX RETURN MORTGAGE LENDERS 

  • All tax liens and judgments must be paid at closing 

COLLECTION ACCOUNTS FOR TEXAS NO TAX RETURN MORTGAGE LENDERS

  • Collections and charge offs need to be paid off except: – Medical Collections – Collection accounts older than 2 years FIRST-TIME HOME BUYER: 
  • A , A- and B credit grades. B- grade case by case 

NON-PERMANENT RESIDENT ALIEN TEXAS NO TAX RETURN MORTGAGE LENDERS: : 

  • 80% max LTV Purchase and Rate and Term Refi 75% max LTV on Cash Out 
  • A, A- and B credit grades only 
  • No FICO is allowed (when no FICO, price at Aand add 0.500% to rate) 
  • Visa classifications allowed (E-1 – E-3/G-1 – G-5/H-1/L-1/NATO/O-1/R1/TN (NAFTA) 

TEXAS NO TAX RETURN MORTGAGE LENDERS FEES 

  • Underwriting Fee $1,495 
  • Flood Cert Fee $12 
  • Attorney Doc Review $150

AGE OF DOCUMENTS FOR TEXAS NO TAX RETURN MORTGAGE LENDERS

Credit Report/Credit Documentation: 90 days old at the time of closing

Income and Asset Documentation: Dated within 90 days of closing

Title Report/Title Commitment: Dated no later than 60 days prior to closing

APPRAISAL REQUIREMENTS BY TEXAS NO TAX RETURN MORTGAGE LENDERS

Full Interior / Exterior appraisal required. Fannie Mae/Freddie Mac Forms 1004/70, 1025/72, 1073/465 or 2090 must be used. All Fannie Guidelines apply to

appraisal process and value determination, in addition an Appraisal Management Company must be utilized for appraiser selection.

The Appraisal should be dated no more than 120 days prior to the Note Date. After a 120 day period, a new appraisal is required. Re-certification of value is

not acceptable. Minimum Square Footage 800 Sq. Feet

Not eligible: Properties for which the appraisal indicates condition ratings of C5 or C6 or a quality rating of Q6, each as determined under the Uniform Appraisal

Dataset (UAD) guidelines. TEXAS NO TAX RETURN mortgage lenders will consider if issue has been corrected prior to loan funding with proper documentation.

A 5% reduction in LTV/CLTV will be required for all properties identified to be in a declining market as designated by the appraiser.

APPRAISAL REVIEW PRODUCTS: An enhanced desk review product, (such as an ARR from ProTeck or CDA from Clear Capital), from a TEXAS NO TAX RETURN mortgage lenders Approved

AMC is required on all transactions.

In lieu of an enhanced desk review product, a field review or second appraisal from a TEXAS NO TAX RETURN mortgage lenders’s AMC is acceptable.

If the Appraisal Review Product value is more than 10% below the appraised value a second appraisal is required. When a second appraisal is provided, the

transactions “Appraised Value” will be the lower of the two appraisals.

A second appraisal is required on loan amounts > $1,500,000

ASSETS – CASH TO CLOSE – TEXAS NO TAX RETURN MORTGAGE LENDERS
• Full Asset Documentation is required for both funds to close and reserves. For most asset types, this would include all pages of the most recent two months

statements or the most recent quarterly statement. All Assets from the borrower(s) must be disclosed and verified by the lender.

  • No business accounts may be used to meet down payment and/or reserve requirements unless the borrower(s) are 100% owners of the business and requires:

o A letter from the businesses accountant OR

o An underwriter cash flow analysis of the business balance sheet to confirm that the withdrawal will not negatively impact the business.

  • Stocks/Bonds/Mutual Funds – 80% may be used for reserves.
  • Vested Retirement Accounts – 70% may be considered for reserves (certain eligible plans can use 70% if borrower > 59 1⁄2 – i.e. 401k)
  • Assets being used for dividend and interest income may not be used to meet reserve requirements
  • If needed to close, verification that funds have been liquidated (if applicable) is required.
  • Gift of Equity is not allowed.
  • Builder profits are not allowed.
  • No employer assistance assets are allowed.
  • Maximum Interested Party Contributions permitted up to 3% for LTV >=80, 6% for LTV<80.

TEXAS NO TAX RETURN MORTGAGE LENDERS ELIGIBLE BORROWERS

Eligible:

  • US Citizen
  • Permanent Resident Aliens
  • Non-Permanent Resident Aliens
  • First Time Home Buyers
  • Non-Occupant Co-TEXAS NO TAX RETURN mortgage applicants
  • Limited partnerships, general partnerships, corporations

o Personal guarantor required

In-Eligible:

  • Foreign Nationals
  • Irrevocable or Blind Trusts
  • Inter-Vivos Revocable Trust

OVERALL CREDIT REQUIREMENTS FOR TEXAS NO TAX RETURN MORTGAGE LENDERS

  • Each borrower’s ‘Credit Score’ is the middle of three or the lesser of two.
  • Representative Credit Score – Texas Bank Statement loans, the lowest Credit Score among borrowers.
  • Each Borrower’s credit profile must include a minimum of 2 trade lines (open or closed) within the last 24 months that show a 12 month history, or a combined credit profile between borrower and co-borrower with a minimum of 3 tradelines.

o Tradeline activity is not required. Eligible tradelines cannot have any derogatory history in previous 24 months.

  • Current housing not reporting on credit can be considered an open trade if supported by bank records (cancelled checks/debits).
    • Borrower(s) not using income to qualify are not required to meet the minimum tradeline requirements listed above. 
  • TEXAS NO TAX RETURN mortgage applicants currently enrolled in credit counseling or debt management plans are not permitted. • All derogatory accounts require a full explanation. 
  • All Judgments or liens affecting title must be paid.
  • Non-title charge- offs and collections within 3 years and exceeding $3,000 (either individually or in aggregate) must be paid.
  • Medical collections are not required to be paid.
  • All past due accounts must be brought current prior to closing. 
  • No authorized user accounts will be used to satisfy minimum tradeline. 
  • Medical derogatory accounts, collections, and charge-offs permitted with letter of explanation. 
  • Disputed accounts require a LOE per Fannie Mae. An updated credit report not

required. 

  • IRS tax payment plans are permitted if current and do not carry a lien on any property.

Minimum FICO 700

Housing 0x30x12

BK (Chap 13 Discharge) 60 Mo

BK (Other) 60 Mo

Foreclosure 60 Mo

Short Sale / DIL 60Mo

TEXAS NO TAX RETURN MORTGAGE FOR FIRST TIME HOME BUYER REQUIREMENTS

  • First Time Homebuyers (“FTHB”) are individuals that have not owned a home or had a residential mortgage in the last 3 years.
  • However, only borrowers with no prior mortgage history or homeownership ever are restricted to the following:

Recent Event not permitted

I/Os not permitted

12 month 0X30 housing history required

Primary Residence Only

Minimum of 6 months PITI reserves required.

DOCUMENT REQUIREMENTS FOR  TEXAS NO TAX RETURN MORTGAGE LENDERS 

(1) 12 or 24 months Personal or 24 months Business Bank statements

TEXAS NO TAX RETURN mortgage applicants who own more than 3 businesses must use personal bank statements option

Bank statements must be most recent available at time of application and must be consecutive

(2) Profit & Loss Statement

If submitting personal bank statements, a P&L prepared by the borrower covering no less than 12 or 24 months is required

The P&L must be signed by the borrower

If submitting business bank statements, a P&L prepared by the borrower covering no less than 24 months is required

Borrower is required to provide separate P&Ls for each business being used in qualifying.

The P&L should generally cover the same calendar months as the bank statements provided.

(3) Validation of a minimum of 2 years existence of the business from one of the following: Business License, Letter from Tax Preparer, Secretary of State Filing or

equivalent Self Employed/Wage Earner Combination – Joint borrowers with 1 wage earner and 1 self-employed business owner can verify income separately, with the self-

employed borrower utilizing bank statements and the wage earner providing pay stubs/W-2s. The wage earner 4506T should include W-2 transcripts only.

PROFIT & LOSS ANALYSIS FOR TEXAS NO TAX RETURN MORTGAGE LENDERS 

  • Net Income from the P&L will be used as Qualifying Income for both personal and business bank statements.
  • The P&L used for qualifying must be signed by the borrower.
  • Declining Income requires an LOE
  • Any amounts on the P&L representing salary/wages paid to the borrower/business owner can be added back and considered in the net income analysis.
  • Expense line items that can be added back to the business net income include depreciation, depletion, amortization, casualty losses, and other losses or

expenses that are not consistent and recurring.

  • TEXAS NO TAX RETURN mortgage applicants utilizing business bank statements that own > 50% but < 100% of a business will be qualified at the P&L/AES net income multiplied by their ownership

percentage.

  • The P&L expense ratio, Gross Income minus Net Income, divided by Gross Income, should be reasonable for the profession.

Example: A home-based sole practitioner therapist/consultant can be expected to have a low expense ratio, while a retail business that has a full staff of

employees and relies heavily on inventory to generate income will have a high expense ratio.

  • If the file does not contain a CPA prepared P&L, steps must be taken by the underwriter to evaluate the reasonableness of the expenses listed by the borrower.
  • This requires the borrower to provide a business narrative which includes detail related to the size/scope and operating profile of the business, including the

following: o Description of Business/Business Profile o Location & Associated Rent o Number of Employees / Contractors o Estimated Cost of Goods Sold (Does

business involve sale of goods or just services?) o Materials/Trucks/Equipment o Commercial or Retail client base? o Business Analysis

  • Expenses listed on a borrower prepared P&L should generally relate to the information provided below.

Joint Accounts – A joint personal account with a non-borrowing spouse or domestic partner can be used for qualifying as follows: o If not contributing

income/deposits, it must be validated by a borrower affidavit o If contributing income/deposits, source must be clearly identified (direct deposit, SSI, trust

income) and amounts must be subtracted from the analysis o Relationship letter must be present in file

Retirement, Government Annuity, and Pension Income – TEXAS NO TAX RETURN mortgage lenders may recognize an ancillary income stream from employment-related assets as eligible for

income qualification. Borrower must evidence a 12 month history of documented draws or interest/dividend income. If, based on that history, the income will

continue for at least three years, the income may be used for loan qualification. One of the following types of income documentation is required: o Copy of

award letter or letters from the organizations providing the income o Most recent personal income tax return with all schedules o Most recent W2 or 1099 o

Most recent 2 months bank statements showing deposit of funds

If the income being used for qualifying represents at least 50% of the borrower’s total income, a five year continuance is required. The borrower must have

unrestricted access, and available to the borrower without penalty. Documentation of asset ownership must be in compliance with the allowable age of credit

documents.

Restricted Stock Income – TEXAS NO TAX RETURN mortgage lenders will only consider restricted stock that was awarded in prior 2 years and became unrestricted (vested) in the current year. The

Vesting Schedule must indicate the income will continue for a minimum of 3 years at a similar level to the prior 2 years. Continuance is based on the vesting

schedule using a stock price based on the 52 week low for the most recent 12 months reporting at the time of closing. A 2 year average of prior income

received from RSU’s or stock option will be used. The following documentation is required: o Copy of the vesting schedule o Most recent W2 and pay stub o

Private Stock not eligible.

Component Sources of Income – A borrower who has a self-employed business and also receives income from other sources is eligible for the bank

statement program. Income sources include but are not limited to rental properties, trust & investment, alimony, etc. These income sources should be

separately documented on the 1003 and should be separately supported by bank statement deposits.

o Rental Income –

months via cancelled checks, deposits clips, or bank records ed by a vacancy/expense factor of

25%

o Trust Income – idenced by unt, distribution frequency, and duration of payments

o Alimony Income –

deposit slips, or bank records

o Note Receivable Income opy of the note confirming amount and length of payment

checks, deposit slips, or bank records

MORTGAGE RENTAL VERIFICATION REQUIRED BY TEXAS NO TAX RETURN MORTGAGE LENDERS

  • 12 months housing history required.
  • Rental history evidenced by 12 months proof of payment via cancelled checks or bank debits.
  • Rent free letters from spouses are not permitted. Housing history is required.

PAYMENT SHOCK FOR TEXAS NO TAX RETURN MORTGAGE LENDERS

Payment shock is limited to 250% on primary residence transactions.

Payment Shock Calculation –

(Proposed PITI – Current PITI) / Current PITI X 100

For borrowers who do not have a current housing payment, or own a home free and clear, payment is shock is not considered.

PRIMARY HOME – TEXAS NO TAX RETURN MORTGAGE LENDERS
• A primary residence is a property that the borrower(s) intend to occupy (within 60 days) as his or her principal residence.

  • Characteristics that may indicate that a property is used as a borrower’s primary residence include:

o It is occupied by the borrower for the major portion of the year.

o It is in a location relatively convenient to the borrower’s principal place of employment.

o It is the address of record for such activities as federal income tax reporting, voter registration, occupational licensing, and similar functions.

o Borrower may not own an additional single family residence of equal or greater value than subject property.

SECOND HOME – TEXAS NO TAX RETURN MORTGAGE LENDERS 

A property is considered a second home when it meets all of the following requirements:

  • Must be located a reasonable distance away from the borrower(s) principal residence.
  • Must be occupied by the borrower(s) for some portion of the year.
  • Is restricted to a one-unit dwelling.
  • Must be suitable for year-round occupancy.
  • Cash-Out transactions are not permitted
  • The borrower(s) must have exclusive control over the property.
  • Gifts not permitted

INVESTOR – TEXAS NO TAX RETURN MORTGAGE LENDERS 

  • Occupancy designation when the borrower does not occupy the subject property.
  • A Non Owner Occupied property must meet the following requirements:

Cash-Out and Debt Consolidation transactions are not permitted

Borrowers with greater than 2 financed properties require an additional 3 months of reserves for each additional financed property.

The 3 months additional reserves are based on the PITI plus HOA fees of the other financed properties.

  • Gifts not permitted

Alt Doc – 12 or 24 months personal or business bank stmts or 1099’s (self employed only) ● Alt Doc – Rental income qualified by lease agreements 

PROPERTY TYPES ALLOWABLE BY TEXAS NO TAX RETURN MORTGAGE LENDERS

Eligible: Single Family Residences1-4 Units (3-4 Units NOO Only), PUDs*, Townhouses, Condominiums (Warrantable Only)

*PUDs- New PUDs/Subdivisions must be at least 60% sold or under bonafide contract. The PUD questionnaire must be included with submission. • Maximum

LTV of 80% for new PUDs

Ineligible: • Acreage greater than 10 acres (appraisal must include total acreage) • Agricultural/Rural zoned property • Condo hotel • Co-ops • Hobby Farms •

Income producing properties with acreage • Leaseholds • Log Homes • Manufactured housing • Mixed use properties • Modular homes • Non-Warrantable

Condos • Properties subject to oil and/or gas leases • Unique properties • Working farms, ranches or orchards.

Fannie Mae eligible projects: TEXAS NO TAX RETURN mortgage lenders. project exposure maximum shall be $3,000,000 or 15% of the project whichever is lower • Borrower

project/Unit concentration limit: two (2) units • Project meets all FNMA Insurance requirements for property, liability and fidelity coverage • Borrower must carry

H06 coverage for replacement of such items as flooring, wall covering, cabinets, fixtures, built-ins and any improvements made to the unit • The Condo Project

Questionnaire must be completed, including all the required documentation from the questionnaire including: CCR, Articles of Incorporation, By-Laws, Master

Insurance Policy, Budget / Balance Sheet & HOA questionnaire .• All projects are subject to full review and approval.

TEXAS NO TAX RETURN Condos – 70% Maximum LTV

TEXAS NO TAX RETURN Condos – 50% Maximum LTV

Purchase • No property flipping, prior owners must have owned the property greater than 6 months. (Bank owned REO are eligible and not considered a flip transaction).

  • Maximum Interested Party Contributions permitted up to 3% for LTV >=80, 6% for LTV<80.

CASHOUT – TEXAS NO TAX RETURN MORTGAGE LENDERS

  • A Cash-Out Refinance transaction allows the borrower to pay off the existing mortgage by obtaining new financing secured by the same property or allows the

property owner obtain a mortgage on a property that is currently owned free and clear. The borrower can receive funds at closing as long as they do not exceed

the program requirements.

  • To be eligible for a Cash-Out Refinance the borrower must have owned the property for a minimum of six months prior to the application date. Properties listed

for sale within the last 12 months are ineligible for cash out.

  • If the property is owned less than 12 months but greater than 6 months at the time of application, the LTV/CLTV will be based on the lesser of the original

purchase price plus documented improvements, or current appraised value. The prior HUD-1 will be required for proof of purchase price.

RATE TERM – TEXAS NO TAX RETURN MORTGAGE REFINANCE 

  • A Rate/Term Refinance transaction is when the new loan amount is limited to the payoff of the present first lien mortgage, any seasoned non-first lien

mortgages, closing costs and prepays, or a court ordered buyout settlement.

  • A seasoned non-first lien mortgage is a purchase money mortgage or a closed end or HELOC mortgage that has been in place for more than 12 months

(and/or not having any draws greater than $2,000 in the past 12 months for HELOC’s. Withdrawal activity must be documented with a transaction history from the HELOC).

  • Limited cash to the borrower must not be greater than 1% of the principal amount of the new mortgage to be considered a Rate/Term refinance.
  • If the property is owned less than 6 months at the time of application, the LTV/CLTV will be based on the lesser of the original purchase price plus

improvements or current appraised value. The prior HUD-1 will be required for proof of purchase price. Proof of improvements is required.

  • There is no waiting period if the lender documents that the borrower acquired the property through an inheritance or was legally awarded the property

(divorce, separation, or dissolution of a domestic partnership). If the borrower acquired the property at any time as a gift, award, inheritance or other

non-purchase transaction, the LTV will be based on the current appraised value. The lender must obtain appropriate documentation to verify the

acquisition and transfer of ownership.

  • Follow FNMA for Delayed Financing guidelines.
  • Properties that have been listed for sale within the past 6 months from the loan application date are not eligible for a rate/term refinance transaction.
  • The rate/term refinance of a construction loan is eligible with the following conditions:
  • If the lot was acquired 12 or more months before applying for the subject loan, the LTV/CLTV/HCLTV is based on the current appraised value of the property.
  • If the lot was acquired less than 12 months before applying for the construction financing, the LTV/CLTV/HCLTV is based on the lesser of i) the current

appraised value of the property and ii) the total acquisition costs.

TEXAS NO TAX RETURN CASHOUT DEBT CONSOLIDATION REFINANCE 

  • A debt consolidation refinance transaction involves the repayment of an existing lien and other borrower debt from the proceeds of a new mortgage. A debt

consolidation refinance may include the payoff of:

o First mortgage secured by the subject property.

o Junior liens secured by the subject property.

o Credit cards, installment loans, past due taxes, etc.

  • Direct evidence of debt payment at closing is required.
  • Borrower must own property for a minimum of 12 months
  • Loan must produce a net tangible benefit to the borrower resulting in an increase in residual income and a reduction of borrower’s total debt obligation

payments.

  • Existing subordination not permitted.
  • Cash to borrower at closing must not exceed 2% of the loan amount.

RESERVE REQUIRED BY TEXAS NO TAX RETURN MORTGAGE LENDERS 

Non-Occupant Co-Borrower: An additional 6 months reserves is required

First Time Home Buyers: Minimum of 6 months PITI reserves required

Interest Only loans require a minimum of 12 months reserves

Occupancy Maximum Loan Amount Reserves

O/O

$250,000 3 Months

$500,000 6 months

$1,000,000 9 Months

$2,000,000 12 Months

$2,500,000 18 Months

O/O Debt

Consolidation $2,000,000 2 Months

  • Borrowers with greater than 2 financed properties require 9 months or otherwise stated higher reserve amount above and an additional 3 months of reserves

for each additional financed property. The 3 months additional reserves are based on the PITI plus HOA fees of the other financed properties. For primary

residence transactions, this requirement can be waived for borrowers who have a minimum 18 months reserves on the primary residence.

Occupancy Maximum Loan Amount Reserves

Second Home $2,000,000 12 Months

Second Home

Debt

Consolidation

$2,000,000 2 Months

  • Borrowers with greater than 2 financed properties require an additional 3 months of reserves for each additional financed property. The 3 months additional

reserves are based on the PITI plus HOA fees of the other financed properties.

Occupancy Maximum Loan Amount Reserves

Non-Owner $1,500,000 12 Months

  • Borrowers with greater than 2 financed properties require an additional 3 months of reserves for each additional financed property. The 3 months additional

reserves are based on the PITI plus HOA fees of the other financed properties

Cash-out permitted to meet reserve requirements if loan-to-value is 5% below the matrix maximum LTV/CLTV and a minimum 680 representative FICO score

DELAYED FINANCING BY TEXAS NO TAX RETURN MORTGAGE LENDERS 

Cash-out on properties purchased by the borrower with cash and owned less than 6 months is allowed. The following requirements apply:

  • Original transaction was an arm’s-length transaction
  • Settlement statement from purchase confirms no mortgage financing used to acquire subject
  • Source of funds used for purchase documented (gift funds may not be included)
  • New loan amount can be no more than the actual documented amount of the borrower’s initial investment in purchasing the property plus the

financing of closing costs, prepaid fees, and points on the new mortgage loan

  • All other cash-out refinance eligibility requirements must be met

SELF-EMPLOYED REQUIRED FOR TEXAS NO TAX RETURN MORTGAGE LENDERS 

Borrowers with Separated Business and Personal Accounts

Using Personal Texas Bank Statements to Qualify

Business license (if available – depending on nature of business)

Letter from a Licensed Tax Professional certifying profession & self-employment in same line of business for a min of 2 years & ownership

percentage

Most recent 12 months personal bank statements – Utilize 12 months average deposits to qualify (minus disqualified/unrelated deposits)

Most recent 3 months business bank statements – Demonstrate transfers from business to personal bank account statements provided

Borrowers must own a minimum of 25% of business to be considered Self-Employed, for use of personal of personal bank statements.

Qualifying income may not exceed the income indicated on the initial 1003.

Using Business Texas Bank Statements to Qualify

Business license (if available – depending on nature of business)

Letter from a licensed tax professional certifying profession & self-employment in same line of business for a min of 2 years and that the borrower is

100% owner of the business – For use of Business Texas Bank Statements/P&L for borrowers who own less than 100% but more than or equal to 80%, a

letter is required from each other owner of the business stating the borrower has full access to the business funds. Less than 80% ownership will

require exception approval for use of Business Texas Bank Statements/P&L

Most recent 12 months business bank statements.

12 month Profit and Loss Statement (P&L) prepared by a Licensed Tax Professional – Net Income on P&L will be used for qualifying (Net Income/12)

o Gross Income must be supported by the total deposits of bank statements provided (variance of 5% allowed for deposits compared to Gross

Revenue)

o Borrower to provide business expenses for Licensed Tax Professional – must be reasonable for the nature of the business

o P&L is not Audited by Licensed Tax Professional

o P&L must be signed by the preparer and borrower

Qualifying income may not exceed the income indicated on the initial 1003.

Borrowers with Personal Accounts (Co-mingled for business & personal use)

Business license (if available – depending on nature of business)

Letter from a licensed tax professional certifying profession & self-employment in same line of business for a min of 2 years and that the borrower is

100% owner of the business – For use of Business Texas Bank Statements/P&L for borrowers who own less than 100% but more than or equal to 80%, a

letter is required from each other owner of the business stating the borrower has full access to the business funds. Less than 80% ownership will

require exception approval for use of Business Texas Bank Statements/P&L

Most recent 12 months personal bank statements.

12 month Profit and Loss Statement (P&L) prepared by a Licensed Tax Professional – Net Income on P&L will be used for qualifying (Net Income/12)

o Gross Income must be supported by the total deposits of bank statements provided (variance of 5% allowed for deposits compared to Gross

Revenue)

o Borrower to provide business expenses for Licensed Tax Professional – must be reasonable for the nature of the business

o P&L is not Audited by Licensed Tax Professional

o P&L must be signed by the preparer and borrower

Qualifying income may not exceed the income indicated on the initial 1003.

Other sources of income

Other sources of income must be verified in accordance with Appendix Q of Regulation Z regarding income

 

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