Self-Employed Mortgages in Texas: Bank Statement Loans

Yes, self-employed borrowers can get a mortgage in Texas, and you do not always need tax returns to do it. A bank statement loan lets you qualify using 12 or 24 months of personal or business bank deposits to show your income, which helps business owners whose tax returns show a lower figure after write-offs. Other options include P&L only, 1099 only, and asset-based programs.

Austin has a lot of business owners, freelancers, contractors, and gig workers. Many of them assume they cannot buy until their tax returns look better. Often that is not true.

Key takeaways

• Conventional and government loans usually use tax returns to calculate self-employed income. Deductions can shrink that number.
• Bank statement loans use 12 or 24 months of deposits instead.
• Other non-QM options include P&L only, written VOE only, 1099 only, and asset utilization or asset depletion.
• Borrowers with as little as 1 year of self-employment may qualify under some programs.
• These loans work for primary homes, second homes, and investment properties.

Why self-employed buyers get stuck

When you are self-employed, a standard mortgage typically looks at your last two years of tax returns and uses your income after business expenses. That is where many owners run into trouble. The deductions that lower your tax bill also lower the income a lender can count.

That is not a problem with your business. It is a mismatch between how you file taxes and how traditional loans measure income. Non-QM loans, short for non-qualified mortgages, were created to fill that gap by using other reasonable ways to document your ability to repay.

How a bank statement loan works

1. You provide 12 or 24 months of bank statements. These can be personal or business accounts, depending on the program.
2. The lender reviews deposits. Transfers between your own accounts, loan proceeds, and other non-income deposits are usually excluded.
3. An expense factor may be applied to business accounts. Because business deposits include money that goes back out for expenses, the program applies an expense ratio or uses a P&L to arrive at qualifying income.
4. Qualifying income is averaged over the statement period.
5. Standard items still apply. Credit, down payment, reserves, and the property all matter.

Other non-QM options for self-employed borrowers

Bank statements are the most common path, but not the only one. Our product guide includes:

• P&L only. Qualify using a profit and loss statement, in some cases prepared by a CPA.
• Written VOE only. Uses a written verification of employment instead of full tax documentation for eligible borrowers.
• 1099 only. Designed for independent contractors paid on 1099s.
• Asset utilization and asset depletion. For borrowers with significant assets, qualification can be based on those assets instead of income. Some asset utilization options have no DTI calculation.
• 60-month asset utilization. Another asset-based approach for eligible borrowers.
• DSCR loans for real estate investors, which qualify on the property's rental income instead of your personal income. See DSCR investor loans.
• Interest-only options, including 30 and 40-year interest-only terms, for borrowers who want flexibility in their payment structure.

Who these loans fit

• Business owners who write off a lot of expenses.
• Freelancers, consultants, and creatives with irregular income.
• Real estate agents, loan officers, and other commission-based professionals who file as self-employed.
• Contractors and tradespeople.
• Gig workers and rideshare drivers with steady deposits.
• Borrowers who have been self-employed for 1 year and have a strong track record in their field.

What to know before you apply

Non-QM loans are flexible, and that flexibility usually comes with tradeoffs. Compared with a conventional loan, you can generally expect:

• A larger down payment in many cases.
• Pricing that is usually higher than a comparable conventional loan, reflecting the alternative documentation.
• Reserve requirements, meaning funds left in the bank after closing.

For some borrowers, the smart move is a bank statement loan now and a refinance into a conventional loan later, once their tax returns support it. We will talk through that plan with you so you see the whole picture.

Common mistakes that slow down self-employed files

• Mixing business and personal money. Paying personal bills from the business account and business bills from personal accounts makes deposits harder to sort out. Keep them separate.
• Large deposits with no explanation. Be ready to document any deposit that is not regular business income, such as a sale of equipment or a transfer from savings.
• Missing pages. Underwriters need every page of every statement, even the blank ones.
• Big changes right before applying. Opening a new business account, switching banks, or changing how you pay yourself can make your history harder to read. Talk to us first.
• Waiting for tax season. If you are debating whether to file an extension or change how you report income, a quick conversation with us and your CPA before you file can save a lot of time later.

Documents to gather

1. 12 or 24 months of complete bank statements (all pages).
2. Proof of business ownership, such as a business license, CPA letter, or state filing.
3. A profit and loss statement, if your program uses one.
4. Asset statements for your down payment and reserves.
5. Photo ID and information about any real estate you already own.

Tip: keep business and personal accounts separate. It makes the review cleaner and faster.

How we help self-employed Austin buyers

We look at your full picture before recommending a loan. Sometimes a self-employed buyer qualifies for a conventional loan after all, which is usually the better deal. When that is not the case, we compare the non-QM options that fit how you earn. Network Funding's in-house underwriting and processing help keep these files moving.

Ready to see what you qualify for?

Call 512-657-1333 or start your application. It takes about 10 minutes. Read more on our self-employed and bank statement loans page, and use the affordability calculator to test a price range.

Additional terms and conditions apply. Not all loan types are compatible with this product. Subject to underwriting conditions. Not a promise to make a loan. All borrowers must qualify. Network Funding, LP NMLS #2297. Kyle Richardson NMLS #863464. Equal Housing Lender.