MBReviewed by Mike Basti, Mortgage Broker & Founder · NMLS #377740
Quick Answer
You're generally eligible if you're self-employed (sole prop, S-corp, LLC, partner, consultant, contractor, professional, freelancer), in business ~2 years, with a CPA/EA/CTEC who can prepare your P&L. You can qualify even if your tax return shows a loss. W-2 earners use conventional/VOE. See Requirements.
Who qualifies
✓ Ideal borrowers
- Business owners — sole proprietors, S-corp, LLC, partners
- Consultants & freelancers with strong cash flow but big write-offs
- Contractors — electricians, plumbers, HVAC, general
- Licensed professionals — doctors, attorneys, architects, CPAs
- Real estate agents with commission income & heavy expenses
- Gig & 1099 earners whose returns understate real income
✗ Better served elsewhere
- W-2 employees → conventional or VOE
- Business under ~1–2 years old
- No cooperative CPA/EA/CTEC → bank statement
- Qualifying on rent alone → DSCR
You can qualify even if your tax return shows a loss: This is the eligibility fact that surprises people most. A savvy business owner uses every legal deduction — depreciation, Section 179, a big equipment purchase — and can end up with a paper loss on their tax return while the business is generating strong, positive cash flow all year. Conventional underwriting reads that loss and stops cold. A P&L loan does the opposite: it looks at the net income on your recent CPA-prepared P&L, which reflects actual profitability, not tax strategy. We've seen borrowers whose returns showed a loss qualify comfortably on a P&L showing six figures of real income. If your accountant did their job on your taxes, this is how you still buy the house. Let's confirm →
Property & occupancy
| Property | Eligible? |
|---|---|
| Primary residence | Yes — most common |
| Second / vacation home | Yes |
| Investment property | Yes (compare DSCR) |
Purchase, rate-and-term refinance, and cash-out are all available on P&L programs.
Who isn't a fit
- W-2 wage earners — a P&L reflects business income; use conventional or VOE.
- Very new businesses — most programs want ~2 years (some 1 year with strong factors).
- No available preparer — if no CPA/EA/CTEC will prepare the P&L, a bank statement loan is the alternative.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties. Nothing here is tax advice.