Can I get a mortgage if my tax returns show low income?

Often yes. Bank statement loans use 12 to 24 months of deposits instead of tax returns, and P&L-only programs use business profit-and-loss statements. Asset depletion loans can qualify based on available assets, and some conventional programs accept one year of self-employment income in certain cases.

How much do bank statement loans cost compared to conventional?

Rates and fees for Non-QM programs are typically higher than conventional or FHA. The exact difference depends on your credit, down payment, reserves and the size of the loan. A side-by-side estimate is the only real way to know.

Do gig workers and freelancers qualify?

Yes. Freelancers usually need two years of 1099 income documented through tax returns, or they can use a bank statement or P&L program. Contractors with long-term agreements may be treated more like salaried employees depending on the terms.

What down payment is required?

Conventional and FHA loans allow low down payments with documented income. Bank statement and P&L programs typically start around 10-20% down, and asset depletion programs often require more. Your program choice is a trade-off between documentation and down payment.

How long does it take to get approved?

Non-QM programs can take longer than conventional because more documentation must be reviewed. A well-prepared file with clean statements and a clear explanation of your income story often moves quickly.

Can I use business bank statements?

Yes — some bank statement programs use business statements and apply an expense factor, while others use personal statements. Business statements are common for owners whose revenue flows through the business account.

What if my business is new?

Some programs allow less than two years of history with additional requirements, such as a history in the same field, strong reserves or a larger down payment. Your loan officer can tell you which lenders will consider it.

Income Guide · 2026

Home Loans for Buyers With Nontraditional Income

Freelance, self-employed, commission, gig or investment income? Plenty of lending programs are built for exactly this — they just ask for a different set of documents.

By Saman Khanian

Mortgage Professional

9 min read

Apply Now (877) 885-0111

Self-employed business owner reviewing income and receipts on a laptop at her home desk

Your income story, documented the right way

The short answer

Nontraditional income isn't a problem. It's a documentation choice.

The standard mortgage playbook wants a W-2, two years of tax returns and a paycheck that looks the same every month. If your income comes in as 1099 payments, business draws, commissions, gig work or investments, that playbook simply doesn't describe you — but the borrowing doesn't stop there.

A whole family of programs exists for exactly this situation. Some read your bank deposits instead of your tax returns. Some use business profit and loss statements. Some qualify you on assets alone. The key is matching the program to how your money actually arrives.

The trade-off is usually between documentation and down payment: the less traditional paperwork you provide, the more equity or reserves a lender will typically want. Knowing which programs fit your income is step one.

Your income type

Where does your income come from?

Most buyers fit more than one of these. The program you choose depends on how your income is documented, not just where it comes from.

Self-employment / business owner

Business draws, S-corp distributions and sole-proprietor profit.

1099 / freelance

Independent contractor income reported on 1099s or invoices.

Commission

Variable commission and bonus-heavy compensation.

Gig & rideshare

Platform income from driving, delivery, hosting or selling online.

Investment & rental

Dividends, interest, rental cash flow and trust distributions.

New business

Owners with less than two years of self-employment history.

Program options

Six programs built for nontraditional income

Typical starting points. Your exact terms depend on credit, reserves, the property and the lender.

Most common

Bank Statement Loan

Best for: Self-employed, 1099, gig
Documents: 12–24 months of statements
Typical down payment: Typically 10–20%

Uses deposits instead of tax returns. Available on personal or business statements.

P&L Only Loan

Best for: Business owners
Documents: CPA-prepared P&L statement
Typical down payment: Typically 10–20%

Business profit and loss stands in for tax returns — common for LLC owners.

Asset Depletion

Best for: Retirees, asset-rich buyers
Documents: Asset statements
Typical down payment: Often 20%+

Qualifies on savings and investments spread over the loan term.

Conventional with alt income

Best for: Commission, bonus, 1–2 year self-employment
Documents: Tax returns + employer letters
Typical down payment: 3%+

Reads variable income carefully but often accepts it with a strong profile.

FHA with alt income

Best for: Variable or mixed income
Documents: Tax returns + statements
Typical down payment: 3.5%

Flexible on credit and income history; stricter on property condition.

ITIN / Foreign National

Best for: Buyers without a U.S. SSN
Documents: Alternative ID + income docs
Typical down payment: Varies by program

For buyers who file with an ITIN or hold foreign citizenship.

Not sure which one your income fits? Send us the scenario.

Apply Now

Documentation

What lenders will ask for

Which of these you send depends on the program. Gathering them in advance is the single biggest factor in how quickly you get to a clear answer.

Bank statements

12–24 months, all pages
Personal or business accounts
Shows deposits, not tax deductions

Business documents

Profit and loss statement
Business license or articles
CPA letter if required

Tax returns (if used)

Two most recent federal returns
All schedules and K-1s
Business returns if applicable

Income story

A short written explanation of your income
Contracts or client agreements
Letters explaining any dips or gaps

Setting up for success

How to strengthen your file

Keep business and personal accounts separate and consistent
Avoid large unexplained transfers or cash deposits before applying
Document the story behind any income dip, gap or new venture
Build reserves — three to six months of payments helps many programs
Keep a higher credit profile; it offsets unconventional income
Talk to a loan officer before you start moving money around

Frequently asked questions

What self-employed and gig buyers ask us most.

Any income that isn't a steady W-2 salary — self-employment, 1099 contract work, commission, gig and rideshare earnings, rental income, investment and dividend income, and some retirement or trust distributions. Each has its own documentation rules.

Written by

Saman Khanian

Mortgage professional at Equitable Lending, helping self-employed buyers and business owners across Los Angeles and nationwide qualify on the income they actually earn.

Your income is yours. The right loan exists.

Tell us how you earn, and we'll show you the programs that fit — with the honest trade-offs on down payment, reserves and cost.