Some self-employed borrowers do not have deposit patterns that cleanly reflect their income — commingled personal and business accounts, seasonal cash flow, or a business structure where revenue passes through several accounts before it becomes personal income. A profit and loss only mortgage qualifies from the accounting itself rather than trying to reconstruct income from bank activity.
What it is
A non-QM product that uses a profit and loss statement, typically prepared or signed off by a CPA, EA, or licensed tax preparer, as the primary income document rather than tax returns or bank statement deposit totals.
Who qualifies
Self-employed borrowers with an established relationship with an accountant who can produce a compliant P&L — often useful when bank statement income would be difficult to isolate cleanly, or when the most recent tax year is not yet filed.
How income is calculated
The net income shown on the P&L — revenue minus business expenses over the stated period — is the qualifying figure. Some lenders also request a period of bank statements or a CPA letter to corroborate the P&L rather than relying on it in complete isolation.
How it differs from a DSCR loan
Like a bank statement loan, this product still qualifies the borrower’s own income. A DSCR loan instead qualifies the subject property’s rent against its own payment, with no accounting document from the borrower involved at all. See DSCR vs. bank statement loans for the fuller comparison of borrower-income products against property-income products.
Where it fits among the alternatives
It is one of several routes to documenting self-employed income in non-QM lending, alongside bank statement loans and 1099 income documentation. Which one fits depends on how the borrower’s specific business generates and records its income.
Related reading
- How DSCR loans work — the property-based alternative to every borrower-income product on this page
- The lender directory — non-QM and DSCR lenders side by side, with terms where published
- All non-QM products
Profit and Loss (P&L) Only Mortgage FAQ
A CPA, enrolled agent, or licensed tax preparer typically prepares or signs off on it. A borrower’s own self-prepared statement is generally not sufficient on its own.
Some lenders request a period of bank statements to corroborate the P&L; others rely on the P&L and accountant verification alone. Policy varies by lender.
No. A bank statement loan builds income from actual deposit activity. A P&L only mortgage uses the accounting statement itself as the primary source.
Lenders typically want to see an established operating history rather than a brand-new business, though the specific requirement varies by lender.
A DSCR loan qualifies the property’s rent rather than the borrower’s business income, which is often the simpler path for a pure rental acquisition regardless of how the borrower’s business is documented.
This page is general educational information about a category of non-QM loan product, not an offer of credit or a description of any specific lender's guidelines. Eligibility, documentation requirements and pricing vary by lender and change over time — confirm current requirements directly with a lender before relying on any specifics here.