Bank Statement Loans in Michigan
A bank statement loan qualifies you on the money actually moving through your accounts: 12 or 24 months of deposits, personal or business, with no tax returns required. It exists because good tax strategy and mortgage qualifying pull in opposite directions, and it’s how self-employed Michigan borrowers, from Grand Rapids contractors to lakeshore business owners, buy without unwinding years of legitimate write-offs. Down payments start around 10% with strong credit.
Who this is for
The Kent County contractor grossing $300,000 who nets $80,000 on paper. The salon owner whose Schedule C is a work of art. The Grand Rapids consultant two years into a practice that took off in year two. If an underwriter reading your tax returns would meet a much poorer person than your bank would, this is your program. Roughly a quarter-ownership stake in a real business is the usual threshold. Paid mostly on 1099s? Statements work for contractors too, and a 1099-only mortgage may be the simpler path.
How your income is calculated
The lender totals your deposits over 12 or 24 months, removes what isn’t income (transfers between your own accounts, loan proceeds, refunds), and then, on business accounts, applies an expense factor. Three methods are common across our shelf:
- Fixed expense ratio: a standard assumption, often around 50% of deposits, treated as overhead. Zero extra paperwork.
- Tax-preparer letter: a CPA or licensed preparer states your actual expense percentage, with floors as low as 10% on lean service businesses. Often the difference between qualifying and not.
- Third-party P&L: a prepared profit-and-loss reconciled against the statements, using the lower of the two readings.
Personal-account programs skip the expense factor and count qualifying deposits at or near 100%, provided the business demonstrably pays you into that account. The adjusted total divided by the months reviewed is your qualifying monthly income. We calculate it every reasonable way before picking the program, because the method is the negotiation.
What you can qualify for
Starting points across our program shelf, not promises; every file is underwritten individually, and guidelines (current as of August 2026) change:
- Statements: 12 or 24 months, personal or business
- Down payment: from 10% with strong credit on loans into the low millions; 20% widens every option and sharpens pricing
- Credit score: from 620 on select programs, with the best pricing above 700
- Loan amounts: to $4 million, well past the jumbo line
- Debt-to-income: up to 55% for well-qualified borrowers
- History: typically 2 years in business; 1 year works with prior same-field experience
- Tax returns: not required, and on these programs not wanted; the statements are the documentation
If life recently happened to your credit
This is the quiet strength of the current program shelf. Major credit events (bankruptcy, foreclosure, short sale) can work at two to three years’ seasoning on select programs, sometimes sooner at reduced loan-to-value, and a single 30-day mortgage late in the past twelve months is tolerated on select programs rather than fatal. Rebuilt-and-recovering borrowers get real terms, not subprime-era pricing. The compensating factors that matter most: down payment, reserves, and a clean recent housing history.
Turned down by another lender?
If a lender that only reads tax returns turned you down on income, that tells you your returns didn’t support the payment. It doesn’t tell you what your business earns, and that gap is exactly what this program was built for. Bring the denial, or the quote that looked too expensive, and we’ll check three things: whether your deposits support the loan, whether a conventional loan still works once your returns are read with the right add-backs, and how the pricing you were offered compares. Bank statement pricing varies from lender to lender, so a second look is worth the call. If the answer is still no, we’ll say so and tell you what would change it.
What it costs
More than a conventional loan, honestly: a somewhat higher rate and a larger minimum down payment, with the premium shrinking as credit score and down payment rise. No mortgage insurance on most structures. Many borrowers treat it as a bridge: buy now on bank statements, then refinance into conventional financing after a tax year or two that supports it, if the numbers favor the move. Model both stages in our mortgage calculator suite.
Bank statement loan vs. the nearest alternatives
| Option | You qualify on | Usually the better fit when |
|---|---|---|
| 12-month bank statements | Your most recent 12 months of deposits | Your latest year is your strongest |
| 24-month bank statements | Two full years of deposits | The business is established with a steady record |
| Conventional loan | Your tax returns | Your returns already support the payment; it’s the cheapest route, and we check it first |
| 1099-only or P&L-only | 1099 forms, or a P&L signed by a CPA or enrolled agent | You’re paid on 1099s, or a tax professional already keeps your books |
| Asset-based loan | Liquid savings, investments and retirement accounts | You have substantial savings and income that doesn’t flow through statements |
| DSCR loan | The rental property’s rent | You’re buying a rental and want your business banking left out entirely |
File taxes with an ITIN instead of a Social Security Number? ITIN accepted, SSN not required: self-employed income documented with bank statements can qualify through our lending partners, on different terms than above. See ITIN loans.
How to get started with Priority Home Mortgage
We’re a Grand Rapids direct lender with in-house underwriting, so we can tell you early, and reliably, how your deposits will count. Bring the plain-English version of your business and two months of statements to start; we’ll tell you the same day which documentation path wins and what the numbers look like. Start with a quick quote or the form on this page.
Bank Statement Loans in Michigan: your questions, answered
What is a bank statement loan?
A mortgage that qualifies self-employed borrowers on the deposits flowing through their bank accounts instead of the net income on their tax returns. The lender reviews 12 or 24 months of statements, filters out non-income deposits, applies an expense factor for business accounts, and averages the result into qualifying monthly income. Everything else, credit, appraisal, assets, closing timeline, works like an ordinary mortgage.
Should I use 12 or 24 months of statements?
Whichever tells your income story better. Twenty-four months smooths out a slow stretch and can lift the average for a steadily growing business; twelve months favors a business whose recent year is much stronger than the one before it. Both options exist on our shelf, and we routinely calculate a file both ways before submitting it, because the choice can change your qualifying income meaningfully.
Personal or business bank statements?
Either works. Personal-account programs typically count qualifying deposits at or near 100% when you can show the business pays you into that account, and usually want to see a separate business account exists. Business-account programs apply an expense factor instead. If your banking is co-mingled, expect the business treatment. Twelve or more months of cleanly separated banking is the single best preparation you can do.
How is my income calculated from business deposits?
Three methods are common across our programs: a fixed expense ratio (often around 50% of deposits assumed to be overhead), a licensed tax preparer's letter stating your actual expense percentage (with floors as low as 10% for lean service businesses), or a third-party profit-and-loss statement reconciled against the statements. Low-overhead businesses often gain the most from documenting actual expenses instead of accepting the default ratio.
Can I really put only 10% down?
On select programs, yes: with strong credit, roughly a 700+ score, financing up to 90% of the purchase price is available on bank statement documentation for loan amounts into the low millions. Most files land between 10% and 20% down, and 20% or more buys noticeably better pricing. The exact answer depends on your score, the loan size, and the property, which is a same-day conversation with us.
I had a bankruptcy or a late payment recently. Am I stuck?
Usually not. Programs on our shelf work with major credit events (bankruptcy, foreclosure, short sale) seasoned as little as two to three years, some at reduced loan-to-value, and select programs tolerate a single 30-day mortgage late in the past year. The file needs compensating strength somewhere, typically down payment or reserves. Bring the story; underwriters read explanations, not just dates.
Do I have to be self-employed to use one?
These programs are built for self-employed borrowers, typically two years in business, with one year possible alongside prior experience in the same field. Independent contractors and 1099 earners fit too, and there are sibling programs that qualify on 1099s or a CPA-prepared profit-and-loss alone. W-2 income can join the file through a co-borrower, blending their full-doc income with your bank statement income on one loan.