Profit and Loss Loan

A profit & loss mortgage program is a powerful option for hard-to-qualify buyers! This loan program is designed for borrowers with high incomes who don't qualify under traditional documentation. By using a Profit & Loss (P&L) statement instead of tax returns, we can help buyers qualify for a mortgage when conventional guidelines fall short.

Key Highlights

• Down payments as low as 15%
• Credit scores accepted down to 620 (620 score needs 30% down)
• No tax returns or 4506-C required
• Maximum DTI up to 49%
• Available for primary residences, second homes, and non-owner-occupied (investment) properties
• Manual underwriting with flexible guidelines
• P&L income documentation allowed

This program works exceptionally well for self-employed borrowers, business owners, or anyone whose tax returns don’t accurately reflect their actual cash flow.

Income Qualification Using a P&L.

Borrowers qualify using a Profit & Loss statement prepared and signed by a licensed tax preparer (CPA, CTEC, or EA). As long as the P&L supports the income needed to qualify, we handle the rest of the process, from structuring the loan to navigating underwriting requirements.

Reserves are required and are based only on the subject property:

• Up to $1,000,000 loan amount: 6 months PITIA
• Up to $2,000,000 loan amount: 9 months PITIA
• Up to $3,000,000 loan amount: 12 months PITIA

Business funds may be used for reserves and closing costs when ownership requirements are met.

Credit Events: Bankruptcy & Foreclosure

This program is more flexible than conventional financing:

• Bankruptcy: 3 years from discharge or dismissal
• Foreclosure: 5 years from completion date
• Short Sale / Deed-in-Lieu / Pre-Foreclosure: 2 years from completion
• No multiple credit events within the past 7 years

Investment Property Friendly

This program can be used for non-owner-occupied purchases, including borrowers with multiple financed properties (up to 10 total). Prepayment penalties may apply to investment transactions, depending on the structure and state guidelines.

Real-World Pricing Example

We priced this program recently for a well-qualified borrower purchasing a new home with 30% down, and pricing came in around 6.50% with no points. Rates are market-driven and vary by credit, LTV, property type, and reserves, but this demonstrates how competitive this option can be.

Bottom Line

If a buyer can support their income with a Profit & Loss statement, this program can open the door to homeownership or real estate investment - even when traditional lending says no. We’re committed to helping buyers navigate these guidelines and find a clear path to qualifying, even in challenging scenarios.

Please let me know if you have any questions or if you or any of your clients, friends, or family members need my guidance. I’m just a call, text, or email away.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Interest rates reached their peak on January 20th and have since moved lower. There is talk now that rates could move a little higher in the coming days as traders may be ready to sell now that the 10 Year yield broke 4.20%. Lower interest rates in the long run look good, but in the short run, we never know!

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers, including conventional, FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the 5s.
• Conventional loans up to $832,750 are in the mid to high 5’s.
• High-balance loans from $832,751 to $1,249,125 are also in the high 5 and 6s.
• Jumbo loans above $1,249,125 are in the high 5’s and 6’s.
• ARMS in the 5’s and some in the 6’s
• Bank statement loans are available again with 10% down, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,325,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No-Ratio Loans require a 30% down payment.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   

Nada today!

**Bad News for Condos***     

Nothing today!

CONDO HELP!!!

If you have a listing or a buyer interested in a specific condo and are unsure whether it is warrantable or Non-warrantable, please call me, and we can look up Fannie’s list in real-time. We don’t know when something has changed, and it would be impossible to track everything day by day, but we don’t mind looking up a few items each day.

The full state of California’s naughty list has been added to: MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!