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12-Month vs 24-Month Bank Statement Loans: Which Look-Back Works for Your Borrower?
Oct 16, 2026 · Varaxon Technologies LLC d/b/a StatementReady
This is educational, not underwriting guidance. Rules below are quoted from specific lender documents as published when checked. Always use the current guidelines for your program.
Most non-QM bank-statement programs let the borrower qualify on either 12 or 24 months of statements. Arch Mortgage Funding, Angel Oak, Plaza Home Mortgage and the Silver Hill program sheet all list both options. [1][2][3][4]
The choice isn't just "fewer statements to collect." The look-back period changes the average, which shorter window the underwriter compares it to, and sometimes whether the loan is eligible at all. Here's how to think it through before you order statements.
What stays the same
The core math doesn't change. Eligible deposits (times ownership % and the expense factor, for business statements) are divided by the number of months. Arch's instructions describe personal-statement income as eligible deposits ÷ 12 or 24 months. [1] Only the denominator and the review rules differ.
What changes: the trend check
Lenders don't just take the average. They compare it with a more recent window and use the lower figure. The windows differ by lender.
| Program document | 12-month option | 24-month option |
|---|---|---|
| Arch Mortgage Funding calculator instructions [1] | Review the 12-month figure and the most recent 6 months; use the lower | Review the 24-month figure and the most recent 12 months; use the lower |
| Plaza Solutions Non-QM 1 snapshot [3] | Net income from the most recent 12 months | Lower of the 24-month figure or the most recent 12 months |
| Newfi Correspondent NQM matrix (eff. Jan 13, 2025) [5] | — | If the 24-month average shows a decline but the most recent 12 months have stabilized, the recent 12-month average may be used. Declining income is ineligible. |
Plaza adds one more test for both options: "The most recent bank statement must be consistent with the qualifying income." [3]
Other rules tied to the look-back
- Recency. Silver Hill and Plaza both require the statements to be dated within 90 days of the note date. [4][3] A file that sits too long can need a fresh statement.
- Loan size. The Silver Hill sheet requires 24 months of statements for loan amounts over $2.5 million. [4]
- Consecutive months. Silver Hill asks for "12 or 24 consecutive months," and Arch's instructions average over "the most recent 12 or 24 consecutive months." [4][1] A missing month in the middle breaks the set.
- Stated income cap. Silver Hill uses the lower of the calculated figure or the monthly income stated on the initial URLA. [4] Make sure the application doesn't understate income.
Same borrower, different answer (illustrative numbers)
A sole owner's net monthly income (after the expense factor) averaged $8,000 in the first year and $10,000 in the second. Within the second year, the most recent 6 months averaged $9,500.
| Approach | Calculation | Qualifying income |
|---|---|---|
| 24 months, Plaza-style (lower of 24 or recent 12) | Lower of $9,000 and $10,000 | $9,000 |
| 24 months, Arch-style (lower of 24 or recent 12) | Lower of $9,000 and $10,000 | $9,000 |
| 12 months, Plaza-style (recent 12) | $10,000 | $10,000 |
| 12 months, Arch-style (lower of 12 or recent 6) | Lower of $10,000 and $9,500 | $9,500 |
For a borrower whose income is rising, the 12-month option often qualifies higher. For a borrower whose income dipped recently, 24 months can smooth it, but most lenders will still look at the recent window. Run both before you pick.
A quick decision checklist
- Total eligible deposits by month for 24 months, if the borrower has them. You can't compare options without the monthly numbers.
- Calculate both averages and the lender's comparison windows. Use the table above as a starting point, then check your lender's current rules.
- Check the trend. Arch requires a thorough review and a borrower LOE when income has dropped more than 20% from its previous higher level. [1]
- Check loan-size and recency rules that might force 24 months.
- Confirm with your AE whether pricing or maximum LTV differs between the two options on their current matrix.
Sources (checked 2026-10-15)
Lender rules as published on the sources_verified date; check the current guide before relying on them.
- Arch Mortgage Funding, Bank Statement Income Calculator (XLSX, © 2026), Calculation Instructions tab, linked from https://mortgage.archgroup.com/arch-mortgage-funding/calculators/ (file: https://mortgage.archgroup.com/wp-content/uploads/sites/4/MCUS-1531AMF-23J-AMF-Bank-Statement-Income-Calculator.xlsx)
- Angel Oak Mortgage Solutions, Bank Statement Loan program page: https://angeloakms.com/programs/bank-statement-mortgage-program/
- Plaza Home Mortgage, Solutions Non-QM 1 Product Snapshot (PDF, © 2025): https://www.plazahomemortgage.com/DownloadFile.aspx?FileName=Solutions+Non-QM+1+Product+Snapshot.pdf&FilePath=%5CDocuments%5CPlazaPrograms%5CSolutions+Non-QM+1+Product+Snapshot.pdf
- Bank Statement product sheet (© 2025 Silver Hill Capital), hosted at https://www.lakeviewcorrespondent.com/wp-content/uploads/2025/07/Bank-Statement-.pdf
- Newfi Correspondent, Delegated Plus NQM Product Matrix, effective January 13, 2025 (PDF): https://newficorrespondent.com/wp-content/uploads/2025/01/Correspondent-Delgated-Plus-NQM-Product-Matrix.pdf
Sources 3–5 are correspondent or product documents. Wholesale (broker) guidelines from the same companies may differ.
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