Can You Get a Bank Statement Loan in Michigan With 12 Months of Statements?

The Quick Read: Yes, on select programs, twelve consecutive months of complete personal or business bank statements can be the full income documentation for a bank statement loan, because the lender reviews your file on documented income under the applicable program, subject to lender guidelines. It is not a no-paperwork loan. Credit, reserves, the property, and your business history are all still reviewed.

• A 12-month window is a recognized documentation length. Some lenders prefer 24 months, and the lender decides.
• Qualifying income comes from your average eligible deposits, adjusted by an expense factor the lender sets.
• Primary-residence purchases and rate-term refinances can reach up to 90% LTV through select lenders.
• Owner-occupied cash-out tops out at 80% LTV. Investment-property cash-out tops out around 75% LTV.
• If the property is a pure rental, a DSCR loan is often the better fit, because it qualifies the property instead of you.

Rules for this loan come from lender guidelines, not from a Michigan statute. A buyer in Grand Rapids and a buyer in Phoenix face the same underwriting math. Where Michigan matters is your income pattern, and we get to that below.

What Does a 12-Month Bank Statement Loan Actually Do?

A bank statement loan is a non-QM mortgage. Non-QM means the loan does not follow the standard rules for agency-style mortgages, so the lender reads your income a different way. Instead of traditional personal-income documentation, the lender averages the deposits that hit your accounts over the lookback window.

Who does that help? Self-employed buyers, 1099 contractors, and business owners with heavy write-offs. Your tax return may show modest profit after deductions. Your bank account may show a business that moves real money. The statements tell the second story.

A year is enough to show a pattern. It is also short enough that one weak stretch carries real weight. More on that below.

How Is Income Calculated From 12 Months of Statements?

The lender totals eligible deposits, removes what isn’t income, applies your ownership share and an expense factor, then divides by twelve. Every program is slightly different, so treat this as the generic shape. Exact factors are set by each lender and are never promised in advance.

In formula form: eligible deposits, times your ownership percentage, times one minus the expense factor, divided by twelve.

Here is a way to picture it without dollars. Say your twelve months of total deposits equal 100 units. Transfers between your own accounts and a one-time loan deposit account for 12 of those units. That leaves 88 eligible units. If you own the whole business, the next cut is the expense factor. The lender then divides what remains by twelve. You qualify on that figure, not on the 100 you started with.

Personal vs. Business Statements

Personal statements are usually read close to the raw deposit average, since there are no business expenses to subtract. Business statements get the expense factor, because deposits are revenue and not profit. The lender picks the factor based on your business type and documentation. You don’t choose it.

A lower factor generally needs support, such as a CPA letter or a third-party profit-and-loss statement, where the program allows it. Some programs use an accountant-prepared expense ratio instead of a fixed one. That can help a business with truly low overhead. It can also hurt, if the real expense picture is heavier than the default.

If business and personal money are mixed in one account, expect the lender to ask for personal statements next to the business ones.

What Do Your 12 Statements Have to Look Like?

They need to be complete and consecutive. That means every page, every month, no gaps, from the account that actually receives your income. Files with missing pages stall more often than almost anything else. Even a page that looks blank needs to be included.

You should also be ready to explain overdrafts and bounced items. A few happen to many healthy businesses. A pattern of them raises questions about cash management, and underwriters notice.

Is 12 Months Better Than 24?

Neither is better across the board. The right window depends on the shape of your income. With 24 months, a seasonal dip gets averaged across a longer stretch. With 12, one weak stretch weighs more. On the other hand, 12 months favors you if income has climbed recently, because older, lower months don’t drag the average down.

Here is the honest tradeoff. A 12-month window can capture only the busy part of a seasonal business. That can invite closer scrutiny, not less. And a few lenders will simply ask for 24 months regardless of what you prefer. If you are weighing the two windows on a super jumbo loan, Lendmire’s piece Can You Use 12 Months of Statements on a Super Jumbo Bank Statement Loan? shows how the same choice plays out at higher loan sizes.

The best practice? Test both. Run your deposits through each window and see which average is stronger and steadier. If the two numbers are close, the shorter file is easier to assemble.

What Else Gets Underwritten Besides the Deposits?

Everything else. The deposit average is one input, not the whole decision. Debt-to-income, credit, reserves, the appraisal, and property eligibility all still apply. Because this loan is reviewed for you personally, your other monthly debts count against that income figure.

Most programs we place files with fall in these typical ranges. They are guidelines from select lenders, subject to lender guidelines, and not a commitment to lend:

• Primary residence, purchase or rate-term refinance: up to 90% LTV through select lenders. The strongest files earn the top of the range.
• Asset-depletion alternative on a primary residence: up to about 80% LTV. This is reviewed against liquid assets instead of deposits.
• Owner-occupied cash-out (primary or second home): up to 80% LTV, with the exact ceiling set by loan size, credit, and expense-ratio method. It never reaches the purchase ceiling.
• Investment-property cash-out: tops out around 75% LTV.
• Investment-property purchase on bank statements: varies by lender, so there is no single number to give.
• Loan sizes: roughly $125,000 to $3,500,000.
• Reserves: commonly around six months of the housing payment.

Term length follows each lender’s program sheet. Don’t count on extended or interest-only structures here. Those are DSCR-side features.

Every file is underwritten individually. A strong score and healthy reserves can offset a thin deposit pattern. The reverse is also true.

Does Michigan Change Anything?

Not the underwriting math. The lender’s guidelines drive the file, and those guidelines travel across state lines. Two Michigan-flavored cautions are worth stating plainly.

First, availability. Lendmire’s consumer mortgage licensing covers 16 states, so confirm your state with the team before you plan around it. Second, income shape. Michigan has plenty of owners whose income swings with the calendar: construction and landscaping trades, snow removal, tourism and seasonal hospitality, and family businesses with uneven months. Healthcare professionals working 1099 contracts are another common profile. For any of these, the 12-versus-24 decision matters more than the state line does.

Seasonal income is averaged across the whole window. Lenders don’t read your best quarter. If your busy months are truly busy, the twelve-month average can still be strong. Just know the number you’ll be judged on is the average, not the peak.

Is Bank Statement Documentation Allowed, Legally?

Yes. Federal ability-to-repay rules require a lender to make a reasonable, good-faith decision that you can repay, and to document it. They do not prescribe one underwriting method. The CFPB’s ability-to-repay compliance guide lists eight required factors and says the rule does not require any particular model. A later revision of the same guide names bank statements among acceptable income records. It also says that a lender relying on account inflows must confirm they are the consumer’s own income.

A supervisory letter from the NCUA adds that a non-QM loan is permitted when the lender makes and documents a reasonable repayment determination. Non-QM is not no-documentation. Nobody sets a legal number of months. Twelve is a program choice.

Which Rule Applies Depends on Occupancy

Occupancy decides which kind of loan you have. A bank statement loan on a home you will live in, or a second home, is a consumer mortgage, and consumer disclosure rules including TRID apply. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from TRID. Don’t mix the two when you plan your file.

Bank Statement Loan or DSCR Loan for a Rental?

For a pure rental, DSCR is usually the cleaner path. A bank statement loan is reviewed for you, so your personal debts count. A DSCR loan, short for debt service coverage ratio, compares the property’s rent to its full monthly housing obligation, and it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s complete DSCR loans guide covers the mechanics in full.

Think of the choice this way:

• Strong deposits, thin rent coverage: a bank statement file can carry the deal.
• Heavy personal debt, strong rent: DSCR often wins.
• Buying your own home or a second home: bank statements fit, and DSCR does not.
• Rent below the full obligation: programs below 1.00x coverage exist through select lenders in the network, but leverage and terms adjust.

Self-employed investors with big write-offs often run both and compare. It costs little to look.

What Makes a 12-Month File Stall?

Most stalls trace to a short list of problems, and most are fixable before you apply.

• Unexplained deposits. Large one-off credits get excluded unless you document them. Keep invoices, contracts, or sale records for anything unusual.
• Mixed accounts. Running personal and business income through one account muddies the average. Separate them going forward.
• Overdrafts and bounced items. A pattern here is a red flag. Cleaning up a few months before applying helps, though you can’t erase history.
• Declining deposits. A 12-month average shows a downward slope directly. Know what you’ll say about it.
• Short history. If you’re under a year in, a 12-month file may not exist yet. Self-employment length requirements are lender-specific.

To strengthen a file, consolidate deposits into one account, line up a CPA letter where a lower expense factor is allowed, and write a short note on your business history. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.

From Statements to Closing: The Steps

The sequence is simple, even if each step takes care.

1. Decide which accounts carry your income, personal or business.

2. Download twelve complete statements.

3. Mark and explain any large or unusual deposits.

4. Share the file so the team can test it against several lenders’ guidelines.

5. Choose a program based on leverage, documentation, and your goals.

6. Move through appraisal, credit review, and underwriting.

Seeing many lenders at once is the broker advantage. One lender may use a stricter expense factor. Another may accept an accountant’s ratio. A third may prefer 24 months. A broker can compare those differences before you commit.

Key Terms Defined

Non-QM loan: A mortgage that doesn’t follow standard agency-style underwriting rules, so lenders can use other ways to document income.

Expense factor: The share of business deposits a lender treats as operating costs, set by the lender, not the borrower.

LTV (loan-to-value): The loan amount as a percentage of the property’s value.

Reserves: Liquid savings you keep after closing, usually counted in months of the housing payment.

DSCR: Debt service coverage ratio, which compares a rental’s income to its full monthly obligation.

Ownership percentage: Your share of the business, used to prorate the deposits you can count.

A twelve-month file lives or dies on the shape of the year behind it, so test that shape before you apply.

About Lendmire

Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. CFPB Ability-to-Repay and Qualified Mortgage Small Entity Compliance Guide

2. CFPB ATR/QM Small Entity Compliance Guide, revised edition