Irregular and Seasonal Deposits: Calculating Bank-Statement Income When Months Don't Look Alike

Bank-statement loans exist for borrowers whose income doesn't arrive as a steady paycheck. That cuts both ways. Lumpy deposits are normal for contractors, landscapers, event businesses and consultants paid per project, but they're also exactly what underwriters scrutinize.

Here's how to calculate and present irregular income so the average holds up.

Irregular income is allowed, if it's considered

The federal ability-to-repay rule doesn't require steady monthly income. Its official commentary says a creditor reasonably may determine that a consumer can make monthly payments even if income, "such as self-employment income, is seasonal or irregular." Its example is a borrower whose income arrives in only a few months each year: if annual income divided across 12 months is enough, the creditor may reasonably find the borrower can repay. [1]

The same commentary says employment may be "full-time, part-time, seasonal, irregular, military, or self-employment, so long as the creditor considers those characteristics." [1] Lenders then set their own rules on top.

Step 1: Average over the full period

Irregular income is exactly why the 12- or 24-month average exists. Total eligible deposits across the whole period, then divide. A 24-month look-back includes two full seasonal cycles, which can make a seasonal pattern easier to show. See article 06.

Step 2: Expect the recent-window check, and prepare for it

Many lenders compare the full average with a recent window and use the lower figure. Arch, for example, compares a 12-month calculation with the most recent 6 months. [2] Plaza requires that the most recent bank statement be consistent with the qualifying income. [3]

For a seasonal business, the most recent months can be the slow season. Newfi's correspondent matrix addresses this directly for its 1099 program: some work "may have a seasonal aspect and recent activity will not support the yearly average," and documentation must be provided to support seasonality. It adds that irregular commission payouts may be supported with proof of pending commissions. [4] That's a 1099 rule, but it shows the kind of evidence underwriters look for.

Practical move: if the recent window is low because of the season, show the same months from the prior year. If last year's slow months looked the same and the year still averaged out, that's your argument.

Step 3: Separate "irregular" from "inconsistent"

Lenders review deposits for consistency. Newfi's matrix says deposits are evaluated "for consistency in size, number, and type," and that out-of-trend activity may need more documentation or be excluded. It treats an isolated deposit over 50% of average monthly sales as large, but says six or more large deposits in 12 months can be considered consistent. [4] Plaza says changes in deposit patterns must be explained, and on personal statements allows ATM deposits only when there's a consistent pattern. [3]

So:

• Irregular but patterned (big project payments every few months from repeat clients): likely income. Document the pattern.
• One-off and unexplained: likely to be sourced or excluded. See article 11.

Worked example (illustrative numbers)

A landscaping business, 100% owned, business statements, 50% expense factor, 24 months.

• 24-month income: ($444,000 × 50%) ÷ 24 = $9,250/month
• Most recent 12 months: ($228,000 × 50%) ÷ 12 = $9,500/month
• Lower of the two: $9,250

If the file instead used 12 months with a recent-6 check, and the last 6 months were November–April, the recent window could come in far lower. That's where the prior-year comparison and a short LOE describing the season help.

Documents that support irregular income

• A business narrative describing the business and its season (Newfi requires one for business or co-mingled statements [4])
• Contracts, invoices or a client list showing repeat customers
• Prior-year statements for the same months
• A borrower LOE explaining the pattern (see article 09)
• For pending payments: proof of the receivable, if your lender accepts it

Sources (checked 2026-10-15)

Lender rules as published on the sources_verified date; check the current guide before relying on them.

1. Consumer Financial Protection Bureau, Regulation Z § 1026.43 and official interpretation, comments 43(c)(2)(i)-4 ("Seasonal or irregular income") and 43(c)(2)(ii)-1: https://www.consumerfinance.gov/rules-policy/regulations/1026/43/
2. 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)
3. 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
4. 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 3–4 are correspondent or product documents. Wholesale (broker) guidelines from the same companies may differ.

© Varaxon Technologies LLC d/b/a StatementReady. Lender and program names are trademarks of their owners. StatementReady isn't affiliated with any lender named here. Navy Federal is a trademark of its owner; StatementReady isn't affiliated with or endorsed by it. Privacy Policy · Terms