Non-QM Bank Statement Loans California
Non-QM / Bank Statement Loans
Self-Employed? Your Bank Statements Are Your Income.
Traditional mortgages require W-2s and tax returns — but if you write off business expenses, your taxable income doesn't reflect what you actually earn. Non-QM loans use your real cash flow to qualify.
- 12 or 24 months bank statements
- Personal or business accounts accepted
- No tax returns required
- Loan amounts up to $3 million
- Credit scores from 620
- Purchase, refinance, and cash-out
A Non-QM (non-qualified mortgage) loan is a home loan that uses alternative income documentation — such as 12 or 24 months of bank statements, 1099s, or asset depletion — instead of traditional W-2s and tax returns. It is the most common solution for self-employed borrowers, business owners, freelancers, and real estate investors in California.
What Is a Non-QM Loan?
A Non-QM loan is any mortgage that does not meet the Consumer Financial Protection Bureau's "Qualified Mortgage" definition — which requires strict debt-to-income and documentation standards. Non-QM lenders use alternative methods to verify a borrower's ability to repay, making these loans ideal for self-employed individuals, investors, and anyone whose income is complex or hard to document with standard tax returns.
Bank Statement Loan — How It Works
Instead of tax returns, a bank statement loan uses 12 or 24 months of your personal or business bank statements to calculate your average monthly income. For business accounts, lenders typically apply an expense factor (40–50%) to determine net income. For personal accounts, deposits are taken at face value. This method captures your true cash flow rather than your tax-reduced income.
1099 Income Loans
If you receive 1099 income as a contractor, consultant, or gig worker, you may qualify using 1 or 2 years of 1099 forms — without providing full tax returns. This is especially useful for borrowers whose Schedule C deductions significantly reduce their reported income on tax returns.
Asset Depletion / Asset Dissipation
High-net-worth borrowers with substantial liquid assets but limited monthly income can qualify through asset depletion — a method where your total eligible assets are divided over a loan term to calculate a monthly "income." For example, $2 million in assets divided over 360 months equals $5,556/month in qualifying income.
Non-QM Loan Terms and Rates
Non-QM loans typically carry rates 0.5%–2% higher than conventional loans, reflecting the additional flexibility and risk. Loan amounts range from $150,000 to $3 million or more. Terms include 30-year fixed, 40-year fixed (with interest-only options), and 5/1 or 7/1 ARMs. Down payments start at 10% for primary residences and 20% for investment properties.
Who Should Consider a Non-QM Loan?
Non-QM loans are ideal for self-employed business owners who write off significant expenses, real estate investors with complex income structures, foreign nationals purchasing U.S. property, borrowers with recent credit events (bankruptcy, foreclosure) who have recovered, and high-income earners whose income is variable or commission-based.
You May Qualify If…
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