A Profit & Loss loan program is a flexible mortgage option designed for self-employed borrowers, business owners, and independent contractors who may not qualify using traditional income documentation.
Instead of relying on W-2s, paystubs, or full tax returns, lenders may use a 1-year or 2-year Profit & Loss statement to help calculate qualifying income. This can allow borrowers to show their business income more clearly, especially when tax returns do not fully reflect their actual earning ability.
Profit & Loss programs can be used for:
- Primary homes
- Second homes
- Investment properties
- Purchase loans
- Rate-and-term refinances
- Cash-out refinances
This can be a strong option for self-employed borrowers with consistent business revenue who need a more flexible way to document income. Loan terms, down payment, credit requirements, and income calculations can vary by lender and program.
