For self-employed borrowers, real estate investors, and other individuals with non-traditional income sources, bank statement loans provide a flexible alternative to conventional mortgage financing. Unlike run-of-the-mill mortgage loans, which require traditional income verification like W-2s and tax returns, bank statement loans allow borrowers to qualify using their personal or business bank deposits.
Whether you’re looking for a primary home, a vacation getaway, or an investment property, bank statement loans provide the flexibility needed to secure the necessary financing. In this blog, we’ll explore the types of properties you can buy with a bank statement loan and how they fit into the non-QM loan landscape.
How Do Bank Statement Loans Work?
Bank statement loans make it easier for self-employed individuals and business owners to qualify for a mortgage by looking at their actual cash flow instead of tax returns or W-2s. If you run your own business, you probably write off a lot of expenses to lower your taxable income. Sadly, that can make it harder to qualify for a traditional loan. With a bank statement loan, lenders review 12 to 24 months of business bank statements to get an accurate picture of what you earn, rather than relying on paperwork that might not reflect your actual income.
This option is a game changer for entrepreneurs, freelancers, commission-based workers, and small business owners who know they can afford a home but struggle with the rigid requirements of conventional loans.
1. Primary Residences
A bank statement loan is an excellent option for self-employed homebuyers looking to purchase a primary residence. If you have a steady flow of income through your business but write off expenses on your tax returns, a traditional lender may not approve you based on reported income.
With a non-QM bank statement loan, lenders analyze your 12 to 24 months of bank deposits to determine qualifying income instead of relying on tax returns. This makes it possible for business owners, freelancers, and commission-based workers to buy single-family homes, townhouses, or condos as their primary residence.
Who Benefits?
- Entrepreneurs and business owners with fluctuating income
- Freelancers, gig workers, and independent contractors
- Commission-based professionals (real estate agents, sales reps, brokers)
- Retirees with alternative income sources
2. Second Homes & Vacation Properties
Many homebuyers use bank statement loans to finance vacation homes to enjoy part-time while keeping their business income intact. Mortgage lenders typically require a higher minimum down payment (often 10-20%) for second homes, but this type of loan allows self-employed borrowers to qualify without handing over any W-2s or tax returns.
Second homes must typically be located in a vacation-friendly area, such as a beach, mountain, or resort town, and cannot be used primarily as rental properties.
Who Benefits?
- Self-employed professionals wanting a personal getaway.
- High-net-worth individuals using bank statements instead of assets
- Business owners looking for a work-from-home retreat
3. Investment Properties (Short-Term & Long-Term Rentals)
Unlike the majority of conventional loans that require strict debt-to-income (DTI) ratios, bank statement loans allow investors to finance rental properties based on cash flow and personal bank statements.
Many investors use non-QM bank statement loans to purchase:
- Single-family rentals (long-term tenants)
- Multi-family properties (duplexes, triplexes, and fourplexes)
- Short-term rentals & Airbnb properties
Some non-QM lenders also offer Debt Service Coverage Ratio (DSCR) loans, which allow investors to qualify based on the property’s rental income rather than personal income.
Who Benefits?
- Real estate investors looking to expand their portfolio
- Airbnb hosts who want to finance short-term rentals
- Multi-property investors with complex tax returns
- Business owners using rental income as an investment strategy
4. Non-Warrantable Condos
It’s not uncommon for condo buyers to face challenges securing financing because their condo community is classified as “non-warrantable” by Fannie Mae and Freddie Mac. Reasons for this include:
- High investor-owned unit ratio (too many non-owner-occupied units)
- Inadequate HOA reserves or pending litigation
- Condo-hotel or resort-style features
Bank statement loans are a flexible financing option for purchasing a non-warrantable condo, making it possible to buy in communities that may not qualify for conventional financing.
Who Benefits?
- Buyers interested in luxury, high-rise, or resort condos
- Investors looking for short-term rental-friendly properties
- Homebuyers who prefer non-traditional condo developments
5. Multi-Unit Residential Properties (Up to 4 Units)
Self-employed borrowers and real estate investors can use bank statement loans to finance multi-unit residential properties, typically up to four units. These properties can be owner-occupied or used as rental income properties, and they offer excellent cash flow opportunities.
For owner-occupied multi-unit homes, some lenders allow rental income from other units to be used as part of the qualification process, making it easier to afford the mortgage.
Who Benefits?
- Homebuyers looking to live in one unit and rent out the others
- Investors wanting multi-family properties for long-term rental income
- Buyers looking for affordable housing solutions with rental support
6. Unique & Luxury Properties
Bank statement loans also work well for high-value properties, custom-built homes, and unique real estate that traditional lenders may not finance.
Examples include:
- Luxury estates and high-value homes exceeding conventional loan limits
- Custom-built homes that don’t fit traditional mortgage guidelines
- Eco-friendly or modern architectural properties
- Barndominiums, guest houses, and alternative living spaces
Since non-QM loans do not have the same restrictions as conventional financing, they offer more flexibility when purchasing unique real estate.
Who Benefits?
- High-net-worth individuals and self-employed buyers
- Real estate investors purchasing high-end rental properties
- Buyers interested in non-traditional housing
Trust Homespring Mortgage for Non-QM Loans in Charleston, South Carolina
At HomeSpring Mortgage, we specialize in bank statement mortgage loans and other non-QM mortgage solutions to help buyers with non-traditional income secure the financing they need and the home they deserve. If you’re interested in learning more, contact us today. Together, we’ll explore your loan options and find the best fit for your property goals!