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Profit & Loss Loan Benefits

ICON April 3, 2024

Profit & Loss Loan

Have Self-employed borrowers who don’t want to use tax returns or bank statements – no problem. Qualify your clients with a CPA or EA prepared P&L. Logan’s P&L Program gives your eligible Self-Employed Borrowers the flexibility to borrow up to $2.5 million using a P&L Statement in lieu of tax returns.

Max Loan Amount $2.5 million
Min 660 Credit Score
Cash in hand Unlimited
12 or 24 Months Business, Personal or Both Ok
Primary, 2nd Home & Investor Properties
No LTV Restrictions for Condos
Non Warrantable Condos OK
Up to 80% LTV – Exceptions possible
Gift of Equity Ok on Primary Homes
Interest Only Options Available
Max 6 loans or $5M – which ever comes first

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Overview:

A profit and loss loan is for borrowers that are self-employed and may not be able to show stable income on bank statements or support their income over the last 2 to 3 months with bank statements therefore a 12 month P&L will give a look at income over the year versus month over month. No other income documentation aside from the Certified profit and loss is required to support income.

A 12 or 24 month profit and loss statement must be done by a third-party tax preparer. It can be a CPA, EA, or CTEC. The expenses are already included in the statement therefore no further deduction is applied when calculating income and the year end total is divided by 12 for a monthly income.

Tax Repair must write a letter to accompany the profit and loss statement that states the borrower has been self-employed for two years in the same line of work, that the tax preparer has done the taxes for the years they prepared the P & L for, and the percentage of ownership the borrower has in the business.

The business does not need to be a corporation or LLC. The borrower can be a sole proprietor without an established entity.

In a purchase transaction gift funds are allowed. There is no borrower minimum contribution. You can have 100% gift for down payment and closing costs. The reserve requirement does need to be satisfied with the borrowers own funds however since the borrower is self-employed business funds can be used to satisfy reserves. This would require an additional statement in the letter from the CPA that use of business funds will not negatively affect the business. In primary transactions, gift of equity is allowed.

You can finance single-family residences, one to four units, condominiums, non-warble condominiums and townhomes.

03 Apr 2024

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Asset Qualification Loans

ICON April 3, 2024

Asset Qualification / Asset Depletion

Have clients who want to leverage their assets such as savings or stock investments to qualify for a loan? Logan’s Asset Qualification Loan uses your Client’s Liquid Assets to qualify for a mortgage. Borrowers simply take their assets and divide them by 60 months. Check with your Logan representative to discuss what assets qualify for this loan.

Max Loan Amount $3 million
Assets divided by 60 months
Min 660 Credit Score
Cash in hand Unlimited
First Time Home Buyer OK – No Restriction
Up to 85% LTV Rate/Term
Gift Funds Allowed, No Borrower Minimum
Primary & 2nd Homes Only
Interest-Only Options Available
Max 6 loans or $5M – which ever comes first

Request A Quote

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Overview:

Asset Qualification, or Asset Depletion Loans, are for borrowers who do not have or may not have any monthly or yearly income, however hold large amounts of liquid assets. A qualifying income amount is derived by taking the assets that they have and dividing them by 60 months to get a monthly income amount.

The borrower needs to have 110% of the loan amount in assets to use the 60 month depletion rate otherwise the depletion rate would be 180 months

This program can be used for primary second and Investment homes. It can be used for single-family, one to four units, condominiums, and non-warrantable condominiums.

Borrower must have the asset for at least 60 days prior to the application date. Allowable assets are as follows. Bank accounts can be used 100% stock bonds. Mutual funds can be used at 70% of their value basted retirement accounts can be used at 70% of their value.

In eligible assets are as follows non-vested or restricted stock accounts, assets or funds held outside of the US cash on hand sweat equity grant funds, down payment, assistance programs, unsecured loans or cash advances in cryptocurrency

Gift funds are permitted for down payment and closing cost. Only no bar or minimum contribution is required. Gift of equity is permitted on primary residences.

03 Apr 2024

ICON Bank Statement Loan Permalink

Bank Statement Loan Benefits

ICON April 3, 2024

Personal/Business Bank Statement Loan

Expand your reach to a large group of high net worth potential borrowers who don’t have the traditional qualifying information on their tax returns. Logan’s Bank Statement Program gives your eligible Self-Employed Borrowers an option to borrow up to $3 million with Personal or Business Bank Statements in lieu of tax returns.

- Max Loan Amount $3 million
- Min 660 Credit Score
- Cash in hand Unlimited
- 12 or 24 Months Business, Personal or Both Ok
- 1099 plus YTD earnings Ok
- Primary, 2nd Home & Investor Properties
- No LTV Restrictions for Condos
- Non Warrantable Condos OK
- Up to 85% LTV – Exceptions possible
- Gift of Equity Ok on Primary Homes
- Sources other than Self-Employment Permitted
- Interest Only Options Available
- Max 6 loans or $5M – which ever comes first

Request A Quote

*Name

*Email

*Phone

What is a Bank Statement Loan?
Bank statement loan is for self-employed borrowers that get paid by cash Zelle 1099 or through invoicing your deposits are used to determine your monthly income.

How do I qualify for a Bank Statement Loan?

If you are self-employed for two or more years, you do not need to have a corporation or LLC you can be a sole proprietor as long as you are not a W-2 employee.

What type of businesses qualify?

Corporations LLC’s sole proprietors all qualify. You do not need to have a license. You only have to work for yourself and not an employer being paid hourly.

How is Income calculated with Personal or Business Bank Statements?

With a personal bank statement we would take 100% of profit distribution deposits if there was a business bank statement, two months of a business bank statement accompanied with the personal bank statement. If there was no business bank statement to accompany personal bank statement, it would be treated as a business account and 50% of the income would be deducted for expenses. With a business bank statement, a flat expense factor of 50% is applied to all deposit transactions to arrive at monthly income figure.

What transactions on a Bank Statement qualify as Income?

For both personal and business bank statements all deposit transactions qualify except for transfers EPP loans and refunds.

What is the minimum FICO requirement?

The minimum file required on a bank statement loan is 660 for a primary residence purchase or rate in term 680 for a primary cash out 660 for a second residence purchase rate in term 680 for a second residence cash out 660 for an investment purchase or rate term 680 for an Investment cash out.

What is the maximum LTV for a Purchase or Rate/Term Refi with a 720 FICO (we can also do 680 and 700)?

Max LTV for rate term purchase with a 720 FO is 85% to 2.5 million eighty% to 3 million. Max LTV for a rate term or purchase with a 680 FICO is 80% to 1.5 million 75% of 2,000,065% to 2.5 and 3 million. Max LTV for 700 purchase or rate in term is 85% of 2,000,080% of 2.575% to 3 million

What is the maximum LTV for a Cash-out Refinance with a 720 FICO (we can also do 680 and 700)?

Max LTV for a cash out refinance for a primary residence is 80% max LTV for cash out for a second home is 70% max LTV for cash out for an investment property is 75%

Can my Down Payment on a Purchase be a Gift? Or a gift of Equity?

Down payment can be a gift 100% gift no borrower minimum contribution is required for down payment or closing cost. A gift of equity is allowed on primary residences. There is a 10% LTV reduction when gift of equity is used

Does my Down Payment on a Purchase have to be Seasoned?

Down payment does not need to be seasoned nor does closing cost, however reserves do you need to be in less? Funds as reserves.

Do I need Cash Reserves on a Bank Statement Refinance or Purchase?

You do need cash reserves on a bank statement for a purchase or rate term refinance. You can use proceeds from a cash out refinance for reserves.

What Type of Properties Can I Finance?

You can Finance single-family residence condo non-wearable condo