For self-employed borrowers, tax returns may not fully reflect their business income. Business deductions can reduce reported taxable income and make it harder to qualify for a traditional mortgage. We offers profit and loss statement mortgage options for eligible Arizona borrowers. These programs provide an alternative way to document business income when purchasing a property or refinancing an existing mortgage.
What Is a P&L Mortgage?
A profit and loss statement, commonly called a P&L, summarizes a business’s revenue, expenses, and net profit over a specified period. A P&L mortgage uses this statement to evaluate qualifying business income under the selected program’s guidelines. It can provide an alternative to traditional tax-return-based qualification.
For this program, a CPA, Enrolled Agent (EA), or CTEC-registered tax preparer must sign the P&L. The lender reviews the statement and any additional documentation required for the transaction.
Arizona P&L Loan Program Highlights
- Loan amounts up to $3 million
- Financing up to 85% loan-to-value
- Minimum credit score of 660
- P&L signed by a CPA, EA, or CTEC-registered tax preparer
- Co-borrower W-2 income allowed
- 100% gift funds allowed, subject to program requirements
- First-time homebuyers eligible
- Primary residences, second homes, and investment properties
- Single-family homes, two- to four-unit properties, and eligible condos
- Interest-only options available
- Cash-out proceeds may be used to satisfy reserve requirements
Purchase a Home Using Your Business Income
If your business generates consistent income but your tax returns make conventional qualification difficult, a P&L mortgage may offer another path to purchasing an Arizona home. Financing is available up to 85% LTV, subject to eligibility. For a qualifying purchase, this may allow a down payment as low as 15%, plus applicable closing costs and any required reserves. The program is available to first-time homebuyers, so previous homeownership isn’t required.
Combine Self-Employment and W-2 Income
Many households earn income in more than one way. One borrower may own a business while another works in a salaried position. This program allows lenders to consider a co-borrower’s W-2 income alongside eligible self-employment income documented through the P&L.
Gift Funds Allowed
Eligible borrowers may use 100% gift funds for the down payment, subject to the program’s gift-fund rules. The gift must come from an acceptable source and be properly documented. We review closing costs and reserve requirements separately, so discuss your planned use of gift funds with us before moving forward.
Refinance With P&L Documentation
P&L financing may also be available to Arizona property owners who want to refinance using an alternative way to document business income. Depending on your qualifications, refinancing may help you adjust your loan structure or access available equity through a cash-out transaction.
Cash-out proceeds may be used for reserves under program guidelines. This can help eligible borrowers meet the requirement to retain funds after closing. The available cash-out amount and required reserves depend on the transaction.
Primary Homes, Second Homes, and Investment Properties
- Single-family homes
- Two- to four-unit residential properties
- Eligible condominiums
Interest-Only Options
Qualified borrowers may be eligible for an interest-only payment option. During the interest-only period, scheduled payments cover interest without reducing the principal balance. This may provide payment flexibility, but borrowers should plan for the payment change when principal repayment begins. We can help you review the interest-only period, the repayment schedule that follows, and available terms.
Contact us, and we’ll connect you with a loan specialist who can give you more information about our profit and loss home loans