The Quick Read: The best program is the one that fits your property, your deposits, and your credit, and a CPA letter can support it without any traditional personal-income documentation. The letter does not replace your bank statements. It backs up a lower expense factor, which raises the income you qualify on. Every file is underwritten individually, subject to lender guidelines.
- A bank statement program reviews your file on documented income under the applicable program, using 12 months of statements.
- On an owner-occupied primary residence, cash-out typically reaches up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio.
- On a second home, cash-out typically tops out around 75% LTV.
- On an investment property, cash-out generally tops out around 75% LTV.
- Loan sizes typically run from $125,000 to $3,500,000, with reserves commonly around six months.
Lendmire is a mortgage broker. It does not lend. It shops a network of wholesale lenders and matches your file to the program that fits.
What Is a Bank Statement Cash-Out Refinance?
It is a new, larger mortgage that pays off your old one and hands you the difference in cash. The twist is how you prove income. Instead of tax returns, the lender studies your bank statements.
Self-employed owners often write off heavy expenses. Their returns show low income, even when plenty of money moves through the account. A bank statement program looks at the deposits instead. That is why business owners, 1099 earners, and freelancers use it.
Most programs we place files with ask for 12 months of statements. They can be personal or business accounts. The lender averages your eligible deposits, then applies an expense factor if the account is a business one. The result is your qualifying income.
Key Terms Defined
Expense factor: the share of business deposits the lender assumes goes to operating costs. Qualifying income is what remains.
CPA letter: a signed letter from a licensed tax professional that states your actual expense ratio. It supports a lower factor than the program default.
LTV (loan-to-value): the loan balance divided by the property’s appraised value.
Cash-out refinance: a new mortgage larger than your current payoff, with the difference paid to you.
Debt-to-income (DTI): your monthly debts divided by your qualifying monthly income.
Reserves: liquid savings left after closing, usually counted in months of housing payments.
How Does Underwriting Treat a Bank Statement Cash-Out, Step by Step?
Underwriting follows a set order, and each step moves the number you qualify on. Here is how it runs on most files.
1. Choose the window and account type. Most programs use 12 months. The statements come from a business or personal account.
2. Strip ineligible deposits. Transfers between your own accounts, loan proceeds, insurance settlements, and one-time non-business deposits come out.
3. Average what remains. The lender divides eligible deposits by the number of months.
4. Apply the expense factor. On business accounts, the lender multiplies the average by one minus the factor, then adjusts for your ownership share.
5. Test the CPA letter. If the letter certifies a lower ratio and the lender accepts it, qualifying income rises.
6. Run debt-to-income. The new payment and your other debts are tested against that income.
7. Underwrite the cash-out. The appraisal, credit, reserves, and maximum LTV all cap how much cash you can pull.
Expense factors are lender-specific, and no federal rule sets one. Don’t count on a particular expense factor until the lender’s program sheet states it.
For the full picture of how Lendmire’s investor programs differ, see the complete DSCR loans guide.
What Does the CPA Letter Actually Do?
It lowers the expense factor, and nothing more. It does not replace statements, and it does not approve the loan.
Consider a business owner whose deposits look strong on paper. The program default assumes a large slice of those deposits goes to expenses. If the owner’s real overhead is far lower, a letter from a CPA, enrolled agent, or licensed tax preparer can certify it. The lender may then use the lower ratio. Income goes up. So does the loan amount you can support.
Think of two otherwise identical files. Both show the same deposits. One carries the default factor, the other a certified lower one. The second file is reviewed on noticeably more income. That gap is the whole point of the letter.
On owner-occupied cash-out, the network’s programs reflect this directly. A primary residence reaches up to 80% LTV with a fixed expense ratio. With an accountant-prepared ratio, the ceiling is typically 75%. Which route wins depends on the lender, your loan size, and your credit.
What the letter should contain
Lenders generally look for a short list of items:
- A specific expense percentage, not a vague statement
- A signature from a licensed preparer, never self-certified
- A period matching your bank statements
- Consistency with your deposits and your business type
A letter that fails any of these tends to be rejected. Then the file reverts to the default factor.
Which Statements Should You Use: Personal or Business?
Use the account your income actually flows through. The choice changes how the letter helps.
| Factor | Business statements | Personal statements |
|---|---|---|
| Expense factor | Usually applied | Often little or none |
| CPA letter helps? | Yes, lowers factor | Rarely matters |
| Best for | Income flows through a business account | Income lands in a personal account |
| Main risk | Default factor shrinks income | Mixed or non-business deposits |
Personal statements often count closer to gross deposits. They only work where your income truly lands in personal accounts. Mixing the two to chase a better number invites questions.
How Do You Find the Best Program for Your Situation?
The best program depends on your property type, credit profile, leverage need, and documentation. No single program wins for everyone. A broker helps because it compares many wholesale lenders instead of one.
Lenders differ on several points. Ask these questions of any program:
- Does it accept a CPA letter, and who may sign it?
- What is the default expense factor, and how low can a letter take it?
- Does it allow cash-out on investment property using bank statements?
- What are the LTV limits for your occupancy type?
- How does it treat personal versus business statements?
- Does it require reserves, and how many months?
- What loan size range does it cover?
A few lenders in our network will accept a lower certified ratio than others. The strictest overlays want a longer track record and tighter deposit consistency. You rarely see these differences until a file is shopped.
The programs also split by what you want to do with the property:
| Goal | Program direction | Leverage on cash-out |
|---|---|---|
| Pull cash from your primary home | Bank statement, owner-occupied | Up to 80% LTV (75% with accountant-prepared ratio) |
| Pull cash from a second home | Bank statement, owner-occupied | Up to 75% LTV |
| Pull cash from a rental | Bank statement or DSCR | Around 75% LTV |
The 90% LTV figure you may see applies to primary-residence purchase and rate-term loans, not cash-out. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
What Changes by Occupancy?
Occupancy decides the paperwork. An owner-occupied file is a consumer mortgage, so it follows consumer disclosure rules, including TRID. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from TRID.
That matters because the rules shape the file. Federal consumer ability-to-repay rules do not directly govern business-purpose credit. The CFPB’s Regulation Z commentary treats credit to acquire, improve, or maintain non-owner-occupied rental property as business-purpose. So the CPA letter is a lender-guideline question. It is not a federal requirement.
Lenders still underwrite carefully. Bank statements are records from a financial institution, so they work as verification. They are not a loophole.
A 2-4 unit house-hack where you live in one unit is a consumer-purpose loan, so the consumer rules apply there.
Where Does the General Rule Break?
Several edge cases catch borrowers off guard.
- The letter changes little when real expenses sit near the default. Skip it then. You gain nothing for the cost.
- Declining deposits hurt. A lender wants steady or rising deposits. A drop in recent months is a red flag no letter fixes.
- Titling matters. Many bank statement loans close in an individual’s name. A rental held in an LLC generally points toward DSCR, subject to program terms.
- Claiming low overhead without proof. With no letter or P&L, you stay at the default factor.
- A P&L-only product is separate. Some programs accept a CPA-signed profit-and-loss statement as income proof without deposit averaging.
- Investment purchase leverage varies. On bank statement paper, investment purchase leverage depends on the lender. Investor-focused leverage guidance belongs on the DSCR side.
A third document type sometimes fits better. Asset-depletion lets you qualify from liquid assets instead of deposits. On a primary residence it runs up to about 80% LTV. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Bank Statement or DSCR: Which Fits a Rental?
Many self-employed investors use both. The two products test different things.
| Factor | Bank statement | DSCR |
|---|---|---|
| What is tested | Your deposits and personal DTI | The property’s rent vs. its payment |
| Multiple properties | Each stacks on one income base | Each stands on its own rent |
| Typical title | Individual name | Often an LLC, subject to program terms |
| Best for | Strong deposits, thin rent | Rent covers payment, messy personal income |
The usual limit on bank statement loans is DTI stacking. Every financed property adds a payment against the same income. A rental that covers its own payment, held by a borrower with complicated personal income, usually fits DSCR better. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
Programs below 1.00 coverage are available through select lenders in the network, though leverage and terms adjust.
A common split is bank statement paper for the primary home and DSCR for the rentals. Compare both tracks before choosing.
What Should You Prepare Before Applying?
Gather these first. They remove most of the delays.
- Twelve months of statements for the account you will use
- A list of any transfers or one-time deposits you can explain
- A signed expense-ratio letter from a licensed preparer, if your real overhead is low
- Your credit profile, current mortgage statement, and a view of your equity
- Proof of reserves, commonly around six months of the housing payment
Ask your accountant for a letter that states one specific percentage, covers the same period as your statements, and matches your business. A CPA letter can be a cheap lever when overhead is low.
Cash-out size is capped by LTV, not by your wishes. A strong appraisal and credit profile earn the top of the range. Weak ones trim it.
Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Can I really do a cash-out refinance with no traditional personal-income documentation?
Yes, on programs built for it. The lender reviews your file on documented income under the applicable program, using 12 months of bank statements. Credit, appraisal, reserves, and LTV limits still apply, subject to lender guidelines.
Does a CPA letter replace my bank statements?
No. The statements remain the core proof of income. The letter only supports a lower expense factor than the program default. A self-written letter is not accepted.
How much cash can I take out?
It depends on occupancy. On a primary residence, cash-out typically reaches up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio. On a second home it is typically up to 75% LTV. On an investment property it generally tops out around 75% LTV. Loan sizes typically run from $125,000 to $3,500,000.
Is a bank statement loan better than DSCR for a rental?
Often not. Bank statement loans stack each property on your personal income, so DTI becomes the limit. DSCR tests the property’s rent against its payment instead. Many investors compare both.
Do I pay more by using a broker?
Not necessarily. A broker is paid by the lender or by the borrower, and the compensation is disclosed on the Loan Estimate for consumer loans. Compare full terms across the programs your broker presents.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CFPB Regulation Z § 1026.3 commentary
This article is part of Lendmire’s self-employed mortgage guides — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Bank Statement Cash-Out Refinance Seasoning Requirements · Bank Statement Cash-Out Refinance Requirements When Equity Is Tight · Bank Statement Cash-Out Refinance Requirements When Your Tax Returns Show a Loss
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.