Bank statement loan FAQ for brokers and processors

A bank statement loan is a mortgage, usually a non-QM program, that qualifies a self-employed borrower using deposits on personal or business bank statements instead of tax returns. Requirements vary by lender and program.

Some non-QM programs qualify self-employed borrowers on bank statements instead of tax returns, but they still ask for other documents, such as proof the business exists and an expense letter or P&L. Requirements vary by lender and program.

They are generally aimed at self-employed borrowers and business owners whose tax returns don't reflect their cash flow. Eligibility rules are set by each lender. Requirements vary by lender and program.

Commonly: the bank statements for the look-back period, plus items such as proof the business exists, an expense letter or P&L, and letters of explanation for flagged items. The exact list is the lender's. Requirements vary by lender and program.

Each qualifies income from a different document: deposits on bank statements, 1099 forms, or a profit-and-loss statement. Which fits depends on the borrower's paperwork and the programs available. Requirements vary by lender and program.

Many bank statement programs use 12 or 24 months of consecutive statements. Some use other periods. Check the program guidelines for the file. Requirements vary by lender and program.

For asset verification on a conventional loan, Fannie Mae's Selling Guide (B3-4.2-01) asks for statements covering the most recent full two-month period (60 days) on a purchase and the most recent full one-month period (30 days) on a refinance. Bank statement income programs look back much further, often 12 or 24 months. Requirements vary by lender and program.

The look-back window changes which deposits are averaged, so the same borrower can show a different monthly income on each. Programs may also price or limit them differently. Requirements vary by lender and program.

Usually the lender asks for the missing statement before it will finish the income review. In StatementReady, a month with no statement in the 12- or 24-month window is flagged as missing and counts as zero in the worksheet until you add it.

Many lenders accept statements downloaded from online banking, and some have rules about transaction histories or scans. Requirements vary by lender and program. StatementReady reads digital PDFs from their text and scanned or photographed PDFs from the page images.

A common method: add up eligible deposits over the look-back period, divide by the number of months, then apply the borrower's ownership share and the program's expense factor. Requirements vary by lender and program. StatementReady's worksheet does exactly that: average eligible deposits × ownership % × (1 − expense factor).

It's the share of business deposits treated as business expenses rather than income. Lenders set it as a fixed percentage or base it on a CPA letter or P&L. Requirements vary by lender and program. You enter the factor from your lender's program on the loan file.

Lenders commonly exclude items that aren't income, such as transfers between the borrower's own accounts, refunds and returned items. Requirements vary by lender and program. StatementReady excludes matched internal transfers, refunds, tax refunds and returned items automatically, and you can override any item.

On business statements, lenders commonly multiply income by the borrower's ownership share. Requirements vary by lender and program. In StatementReady you enter the ownership %, and a blank field counts as 100%.

It depends on how the borrower runs their money and which program you're using. Programs often treat business and personal statements differently. Requirements vary by lender and program.

StatementReady builds an income worksheet from the uploaded statements using the months, ownership % and expense factor you enter. It's a tool to check against your lender's guidelines, not a lending decision. You and your lender make the final call on what counts as income.

NSF means non-sufficient funds: a payment was presented and the account didn't have enough to cover it. Many statements list NSF or returned-item fees.

There's no single number. Non-QM programs set their own tolerances, often over the most recent 12 months, and some are stricter about recent NSFs. Requirements vary by lender and program.

They can. Underwriters may treat NSFs and overdrafts as part of the overall credit picture and may ask for an explanation, especially if they are recent or repeated. One overdraft doesn't automatically mean a denial. Requirements vary by lender and program.

It counts NSF and overdraft occurrences by month and account, and warns you when a count is over the limit you set on the loan file. If you leave the limits blank, it uses 3 in 12 months or 6 in 24 months. Set them to match the program you're submitting to.

Under Fannie Mae's Selling Guide (B3-4.2-02), a large deposit is a single deposit over 50% of total monthly qualifying income. Non-QM and other programs may use different tests. Requirements vary by lender and program.

Under Fannie Mae's guide, on a purchase a large deposit has to be sourced if the funds are needed for the transaction. On a refinance documentation isn't required, though the lender still considers whether the funds were borrowed. Read the guide section and your lender's rules. Requirements vary by lender and program.

It flags deposits over 50% of the monthly qualifying income you enter on the loan file, and builds a list of letters of explanation and sourcing requests you can export.

Usually with a letter of explanation (a short written statement from the borrower) plus documents showing where the money came from, such as the statement of the account it was transferred from. What the lender wants depends on the program. Requirements vary by lender and program.

Your first 2 loans are free in StatementReady, with no card required. Upload the PDFs to a loan file in StatementReady, then use the Excel worksheet export. You get an .xlsx with the income summary and month rows, the letter-of-explanation list and average daily balances. CSV and PDF exports are also available.

Yes. Digital PDFs are read from their text, and scanned or photographed statements saved as PDF are read from the page images. Blurry, cut-off or very low-resolution scans are harder to read, and any statement that doesn't reconcile is flagged.

NFCU checked on real files; other US banks and credit unions are accepted, checked to the cent, and marked Unverified if a statement doesn't reconcile or can't be checked. StatementReady is not affiliated with or endorsed by Navy Federal Credit Union (NFCU).

Yes. You can upload separate PDFs or one combined PDF, and StatementReady splits it into individual statements and detects the account and period for each. The limit is 20 MB per PDF.

Many programs look for about two years of self-employment, and some accept less with conditions. Requirements vary by lender and program.

Underwriters often look at the trend across the window, not only the average, and may ask for an explanation when income drops or swings. Requirements vary by lender and program. StatementReady's worksheet shows deposits month by month so you can see the trend before you submit.

Every statement is checked to the cent: opening balance plus credits minus debits must equal the closing balance. It also checks that each closing balance matches the next opening balance and flags missing months. Statements that don't reconcile, or can't be checked, are marked Unverified, and exports carry that warning. You review flags and can edit rows.

No. It doesn't make a credit decision. You review the flags, and you and your lender stay responsible for checking the results against program guidelines.

StatementReady encrypts data in transit (TLS) and at rest (AES-256). Borrower names are encrypted at the field level, and only the last 4 digits of account numbers are stored. Each brokerage's data is isolated, and loan data stays hidden until you sign in with an authenticator-app code.

Create a borrower upload link on the loan file. It works for that one loan only, needs no borrower login, expires within 7 days (you choose 1–7), and you can revoke it anytime.

StatementReady does not use your files to train AI models.

By default, the statement PDFs and the rows extracted from them are purged 30 days after the loan file is opened. You can change the purge date on the loan, or purge or delete the file sooner. The loan record stays with the inputs you entered.

Your first 2 loans are free, with no card required. After that it's $15 per loan file pay-as-you-go, or Solo at $49/month or $490/year, then $8 for each additional loan file. Team is coming soon.

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