Yes. General contractors and builders can qualify for a mortgage with 12 or 24 months of bank statements instead of tax returns. The lender adds up your business deposits, takes out an expense factor for your costs, and uses what is left as your income. Most lenders want about two years in the same line of work.
How the money comes in
Contractors get paid in draws and progress payments, often large checks tied to stages of a job. The same account also pays subs, suppliers and permit fees.
What the lender looks for in your statements
Lenders count client payments and draw checks. Material refunds, deposits you are holding for a client and loans from a supplier line are usually removed.
Transfers between your own accounts, loan proceeds and other one time money are usually left out. The guide on deposit problems covers how lenders handle large or unusual deposits.
Your costs and the expense factor
Your costs depend on how you run jobs. If you buy materials and pay subs through the business, costs are high and the 50% default can work for you. If you mostly sell your own labor and management, a CPA letter may show lower costs and a bigger income figure.
Most lenders start with a 50% expense factor. A letter from your CPA or enrolled agent, or a profit and loss statement prepared by a tax professional, can show lower costs. See how expense factors work.
Proof that the business is real
Your Florida contractor license through the Construction Industry Licensing Board at DBPR, plus your Sunbiz company filing. Lenders also accept a CPA or tax preparer letter confirming how long you have been in business.
Common snags, and how to avoid them
- A huge deposit from one job that skews the average. Expect the lender to ask for the contract.
- Client deposits for future work that you have not earned yet.
- Recent losses on a job that dragged deposits down.
What to gather
- 12 or 24 months of business or personal bank statements, every page.
- Proof of your business or license.
- A CPA or enrolled agent letter if your costs are below half of revenue.
- Recent statements for savings or retirement accounts you will use for the down payment or reserves.
Other loans to compare
If you keep clean books, a P&L only loan may show your income more accurately. Bank statement loans usually cost more than a conventional loan and ask for a larger down payment, so I check whether a standard loan can count your income first.
More jobs: bank statement loans by job · Back to no tax return loans · bank statement loan requirements
Common questions
Can general contractors and builders get a mortgage without tax returns?
Yes. A bank statement loan uses 12 or 24 months of deposits instead of tax returns. Most lenders want about two years in the same line of work.
What expense factor will the lender use?
Most lenders start at 50% of deposits. A CPA or enrolled agent letter, or a third party profit and loss statement, can support a lower number if your real costs are lower.
Do bank statement loans cost more?
Usually, yes. Expect a higher rate and a larger down payment than a conventional loan. The exact cost depends on your credit, down payment and documents.