Our P&L loan program is designed to be the easiest way for self-employed home buyers to get approved.
Business owners in the US have a unique advantage with the US tax code, allowing them to offset significant amounts of taxable income with deductions, which effectively reduces their tax burden.
While this has clear tax advantages to the business owner, the problem often arises when the business owner applies for a home loan and is denied due to a lack of income and/or high debt-vs-income ratio.
Why? Because traditional loan programs (such as Conventional, Jumbo, FHA, VA, USDA) all require the lender use the taxable income from the applicant's income tax returns (business and/or personal). This limits the lender to using only a fraction of the business owner's true income, which leaves the business owner frustrated and feeling trapped.
Rather than using tax returns, we allow the business owner to have their licensed tax preparer provide a 1-2 Year Profit and Loss (P&L) Statement as income, which often provides a more accurate portrait of the applicant’s true income profile.
There are no prepayment penalties for owner occupied and second homes, so the loan can be refinanced if desired, as soon as the applicant qualifies for a traditional home loan. Many of our clients use this program to buy their dream home and decide to refinance it into a traditional loan once they and their tax advisers determine the optimal time. It allows the business owner to take control and buy a home on their terms.
This loan program is similar to our Bank Statement Program, but the documentation requirements are much easier than providing 12-24 months of bank statements.
Have you been in business less than 2 years (but over 1 year)?
We can approve this scenario, with a supporting P&L and proof that you have worked in your current industry for at least 2 years.
There are some lenders that offer this type of program, but few of them can match our experience and success rate, making us the trusted professionals you need to make this program work for you.
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