Bank Statement Loans in California 2026

Self-employed in California? Qualify for a mortgage using bank statements instead of tax returns. Complete guide to bank statement loans in Los Angeles ...

Bank Statement Loans in California: Self-Employed Borrower Guide 2026

If you are self-employed in California and struggling to qualify for a traditional mortgage, bank statement loans offer a proven alternative. Instead of tax returns that understate your true income due to business deductions, bank statement loans use 12 or 24 months of deposits to calculate your qualifying income.

California has one of the largest self-employed workforces in the country, with thriving industries in tech, entertainment, agriculture, biotech. Many of these professionals earn strong incomes but show lower taxable income on their returns. Bank statement loans bridge that gap.

How Bank Statement Loans Work in California

Bank statement loans allow self-employed borrowers to qualify using actual bank deposits rather than adjusted gross income from tax returns. Here is how the process works:

Submit 12 or 24 months of bank statements (personal or business accounts)
Lender calculates average monthly deposits after removing non-recurring items
An expense factor is applied (typically 10-50% depending on business type)
The resulting figure becomes your qualifying income

Income Calculation Example for California Borrowers

Factor	12-Month Program	24-Month Program
Total Deposits	$300,000	$580,000
Non-Recurring Removed	-$18,000	-$32,000
Net Deposits	$282,000	$548,000
Expense Factor (25%)	-$70,500	-$137,000
Qualifying Annual Income	$211,500	$411,000
Monthly Income	$17,625	$17,125

Who Benefits Most in California?

Bank statement loans are particularly popular among California professionals in these industries:

Tech professionals — High revenue with significant business deductions
Entertainment workers — Variable income that does not fit traditional underwriting
Agriculture professionals — Strong cash flow but complex tax situations
Biotech business owners — Seasonal income patterns
Gig economy workers and freelancers — Multiple income streams across platforms

Bank Statement Loan Requirements in California

Minimum Qualifications

Credit Score: 620-660 minimum (best rates at 720+)
Self-Employment: Minimum 2 years in the same business
Down Payment: 10-25% depending on credit score and loan amount
Bank Statements: 12 or 24 months of personal or business statements
Documentation: Business license, CPA letter, or tax preparer letter
Loan Amounts: $100,000 to $3,000,000+

Rate Comparison

Program	Typical Rate	Max LTV	Best For
12-Month Personal	7.50-8.50%	85%	Consistent deposits
12-Month Business	7.75-8.75%	80%	Business owners
24-Month Personal	7.25-8.25%	90%	Lower rates
24-Month Business	7.50-8.50%	85%	Larger loans

Case Study: Los Angeles Bank Statement Loan

Borrower Profile:
Business: digital marketing agency
Location: Los Angeles, CA
Loan Amount: $520,000
Bank Deposits: $312,000 over 12 months
Qualifying Income: $18,500/month
Program: 12-month personal bank statement
Result: Approved and closed in 28 days

This borrower's tax returns showed only $68,000 in adjusted gross income due to legitimate business deductions. The bank statement program recognized their true earning power of $18,500/month, qualifying them for the home they needed.

Tips for Maximizing Your Bank Statement Loan Approval in California

Keep business and personal accounts separate — Cleaner statements mean faster processing
Avoid large cash deposits — They require sourcing documentation and slow the process
Maintain consistent deposits — Lenders look for stable income patterns
Reduce outstanding debts before applying — Lower DTI improves your rate
Get a CPA letter ready — Confirms your self-employment status and business type
Choose the right statement period — 24-month programs often offer better rates

California Bank Statement Loan vs. Traditional Mortgage

Feature	Bank Statement Loan	Traditional Mortgage
Income Verification	Bank deposits	Tax returns & W-2s
Self-Employed Friendly	Yes	Often difficult
Approval Speed	21-30 days	30-45 days
Down Payment	10-25%	3-20%
Interest Rates	7.25-9.50%	6.50-7.50%
Max Loan Amount	$3M+	Conforming limits
DTI Flexibility	More flexible	Strict 43-50%

Getting Started

Ready to explore bank statement loans in California? Our network of 150+ licensed Non-QM lenders can help you find the right program.

[Get Pre-Qualified](/get-started) | [Compare California Lenders](/locations/california) | [Bank Statement Loan Details](/programs/bank-statement)

Frequently Asked Questions

Can I use business bank statements for a mortgage in California? Yes, most California bank statement lenders accept both personal and business bank statements. Business statement programs typically apply a higher expense factor (25-50%) compared to personal statements (10-25%). Some lenders allow you to combine both personal and business statements for a blended calculation.

What credit score do I need for a bank statement loan in California? The minimum credit score for bank statement loans in California is typically 620-660. However, borrowers with scores of 720 or higher qualify for the best rates and highest LTV options (up to 90%). Each 20-point increase in credit score can reduce your rate by 0.125-0.25%.

How much can I borrow with a bank statement loan in California? Bank statement loans in California range from $100,000 to $3,000,000 or more. Your maximum loan amount depends on your qualifying income (calculated from bank deposits), credit score, down payment, and the property value. Jumbo bank statement loans above $1 million are available with 25-30% down.

Do bank statement loans require a larger down payment in California? Bank statement loans in California typically require 10-25% down, compared to 3-20% for conventional loans. The exact requirement depends on your credit score, loan amount, and property type. Borrowers with 740+ credit scores may qualify for as little as 10% down on primary residences.

How long does it take to close a bank statement loan in California? Most bank statement loans in California close in 21-30 days from application. The timeline is comparable to conventional loans. The main factors affecting closing speed are the appraisal turnaround time and how quickly you provide the required documentation (bank statements, CPA letter, business license).

Can I refinance with a bank statement loan in California? Yes, bank statement refinancing is available in California for both rate-and-term and cash-out refinances. Cash-out refinances typically allow up to 75-80% LTV. This is a popular option for self-employed homeowners who want to access equity without providing tax returns.

Explore California Non-QM Resources

California Location Hub

Visit our [California Non-QM Lending page](/locations/california) for a comprehensive overview of Non-QM mortgage options across the state, including lender directories, market statistics, and program comparisons.

California City Guides

Explore Non-QM lending options in specific California markets:

[Los Angeles Non-QM Lenders](/locations/california/los-angeles) — Local lender directory, market data, and neighborhood insights
[San Diego Non-QM Lenders](/locations/california/san-diego) — Local lender directory, market data, and neighborhood insights
[San Francisco Non-QM Lenders](/locations/california/san-francisco) — Local lender directory, market data, and neighborhood insights

Loan Program Details

[Bank Statement Loan Program](/programs/bank-statement) — Full program details, requirements, and rates
[Self-Employed Mortgage Options](/blog/self-employed-mortgage-options) — 7 ways to get approved
[Get Pre-Approved](/get-started) — Start your application today