The Quick Read: A contractor usually qualifies for a super jumbo loan on bank deposits rather than on a tax return that write-offs have shrunk. Through select wholesale programs, the lender totals 12 or 24 months of eligible deposits, removes non-income credits, and applies an expense ratio. It then tests the result against debt-to-income, credit, leverage and reserves, subject to full underwriting.
- Qualifying income comes from eligible deposits divided by the statement months, after an expense ratio.
- Transfers from the borrower’s own business into a personal account count at 100%.
- Leverage steps down as the loan grows, and every loan above $4,000,000 is reviewed case by case.
- Reserves run 3, 6 or 9 months depending on loan size.
- Rental properties can use a separate path that reads rent coverage instead of personal income.
Contractors hit a specific problem. Depreciation on trucks and equipment, subcontractor costs and job-related write-offs cut the income line on a tax return. Deposits tell a truer story. Across the wholesale network, the programs that read deposits are the ones built for this borrower.
What Makes a Mortgage “Super Jumbo”?
No regulator defines it. The only official line is the conforming limit, which for a one-unit home sits at $832,750 as the baseline and $1,249,125 in the highest-cost counties, per Calculated Risk’s summary of the FHFA announcement. Anything above the local limit is jumbo. “Super jumbo” is a market label, and lenders draw that line in different places, commonly in the low-to-mid single-digit millions.
That matters because the rules change as the loan grows. Through select wholesale programs, files run from $300,000 to $30,000,000, but no single program covers that whole range. A portfolio non-QM bank-statement program carries files to $6,000,000.
Why Contractor Income Reads Low on a Tax Return
A tax return is built to minimize taxable income. For a contractor that means equipment depreciation, vehicle expenses, tools, materials and payments to subs all reduce the net figure. The return is accurate for tax purposes. It is a poor picture of cash moving through the business.
Standard full-documentation underwriting reads Schedule C or K-1 net income. When that number is small, the loan size you can support is small. Bank-statement programs exist to fix this mismatch. They read deposits, apply an expense ratio, and arrive at a qualifying income that reflects how the business actually runs.
Non-QM does not mean loose. The CFPB’s assessment of the ability-to-repay rule notes that self-employed borrowers whose loans are not eligible for agency purchase generally have to meet the General QM standard to get a qualified mortgage, and that lenders found the older income documentation rules hard to apply to self-employed borrowers. A bank-statement loan still verifies the income it relies on. The lender simply verifies it from a different record.
How Underwriting Turns Deposits Into Income
Here is the sequence on a typical contractor file.
1. Choose the documentation lane. The options are 12 or 24 consecutive months of personal or business statements, a profit-and-loss method capped at 80%, or an asset-based path. The bank portfolio program uses 12 months.
2. Pick the account. Personal statements are read closer to raw deposits. Business statements need at least 25% ownership and take an expense ratio. Statements must be consecutive. Transaction histories do not substitute.
3. Screen the deposits. Transfers between the borrower’s own accounts, loan or credit-line advances, refunds and unexplained cash come out. Transfers from the borrower’s own business into a personal account count at 100%.
4. Apply the expense ratio. The fixed ratios are 20% for a service business with no employees, 40% for 1-5 employees, and 50% for 6 or more employees or any product business. An accountant-provided ratio is the alternative. The borrower does not choose the number. The business profile sets it.
5. Average over the statement months. Eligible deposits after the ratio are divided by 12 or 24.
6. Run debt-to-income. Debt-to-income can reach 50%. A bank-statement loan underwrites the person, so every existing obligation counts against the derived income.
7. Add the size layers. Reserves, leverage limits, credit tiers and an appraisal follow, all scaled to the loan amount.
Where the money lands changes the answer. A contractor who runs everything through a business account with six employees takes a 50% ratio. The same contractor, working alone as a service business, may fall in the 20% bucket. Neither changes what the business earns. They change what the file shows.
The Contractor-Specific Deposit Problem
Contractors have messier accounts than most self-employed borrowers. The cleanup work happens before the file goes in.
Pass-through payments. Money that arrives from a client and goes straight out to a sub or supplier still shows up as a deposit. The expense ratio is the lender’s way of handling that.
Commingled accounts. A single account carrying personal spending, job costs and owner draws is hard to read. Separate business statements are cleaner, though they require the 25% ownership test and the ratio.
Owner transfers and loan advances. A line-of-credit draw deposited to cover payroll is not income. Expect it to be removed.
Seasonality. A 12-month window can capture a strong year or a weak one. A 24-month window smooths a slow winter or one large job, but it also pulls in an older, possibly lower period. Files with a recent dip deserve a plain written explanation.
Ownership percentage. With under 25% ownership of a business, its statements generally cannot be used to support the income. Partners and S-corp owners should confirm their share before choosing the business-statement route.
On these files, the common failure is not a low average. It is an unexplained large deposit or a gap in the statement run. A short explanation letter attached up front is cheaper than a condition later.
Choosing a Documentation Path
| Path | How income is measured | Best fit |
|---|---|---|
| Bank statements, 12 or 24 months | Deposits less expense ratio | Strong deposits, thin tax return |
| Profit-and-loss method | P&L, capped at 80% | Clean books, accountant support |
| Asset allowance | Liquid assets divided by 36, 60 or 84 months | Large liquidity, uneven deposits |
| Assets only | Liquidity vs. loan plus costs | Substantial U.S. liquid assets |
| Full documentation | Tax-return net income | Returns that already show high income |
Retirement accounts count at 70%, or 80% at age 59.5 and over. Business funds, gifts, unvested stock and cryptocurrency never count. The asset-only path needs U.S. liquid assets equal to the loan amount plus closing costs, and the asset paths apply to primary and second homes only.
Run it this way: say a contractor with strong deposits and a short operating history might read well on 12 months of statements. A contractor with a down year in the middle of a 24-month run might do better on 12. A contractor with large investment accounts and lumpy deposits may find the asset allowance cleaner than either.
What Changes as the Loan Gets Bigger
Leverage steps down with size. On a primary residence, through select wholesale programs and subject to underwriting, the best available purchase figures run 90% to $1,000,000, 85% to $2,000,000, 80% to $3,000,000, and 75% to $3,500,000 on a purchase and on to $4,000,000 at the top credit tier. Above $4,000,000, leverage is reviewed case by case before submission. On the bank portfolio program, a primary-residence purchase reads 65% from $4,000,000 to $5,000,000, then 60% from $5,000,000 to $10,000,000, and 55% from $10,000,000 to $30,000,000, each on review.
Second homes and investment property use their own ladders. Take every figure from the right occupancy, never by subtracting from the primary number.
Credit follows the same logic. The floor is 660 on the portfolio program up to the super-jumbo line, and 700 above it. The bank portfolio program keeps a 680 floor at every size. The top leverage cell in each band carries its own minimum score. A lower score takes a lower leverage cell within the same band.
Reserves are 3 months up to $500,000, 6 months up to $1,500,000, and 9 months above, with 2 more months per additional financed property to a 12-month maximum. First-time investors need 12 months.
Above $3,500,000 on a primary residence, and $3,000,000 on a second home or investment property, added overlays apply on the portfolio program. They include a 700 credit floor, a 0x30x24 housing history, 48-month seasoning after a credit event, U.S. citizen or permanent resident status, no rural property and a ten-acre maximum. Cash-out proceeds cannot satisfy reserves.
On cash-out, proceeds are unlimited at or below 60% LTV. Above 60% the portfolio program caps cash in hand at $1,500,000. The bank program publishes no cap. Interest-only reaches 85% LTV with a 700 floor on the portfolio program, on a 40-year term with a 10-year interest-only period. On the bank program it is 60%, in 5- and 7-year fixed-period adjustables. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
For more on how size limits work, see Lendmire’s explainer on super jumbo self-employed loan limits.
Where the General Rule Breaks
Rental property is a different test. A contractor-investor faces two questions. The home they live in is underwritten on the person: deposits, debt-to-income and reserves. Each rental can stand on its own rent. Credit to buy or maintain a non-owner-occupied rental is generally treated as business purpose, and 12 CFR 1026.3 exempts business-purpose credit from Regulation Z. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
That distinction has a practical payoff. Each bank-statement loan adds to personal debt-to-income. DSCR financing qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, so it is the usual route for scaling a rental portfolio. Lendmire’s complete DSCR loans guide covers that product.
1099 totals alone usually do not qualify. They help reconcile deposits, but lenders follow the money into the account.
New contractors have fewer options. A business with under about a year of history is hard to document on deposits. Time in business and ownership proof are standard requests.
Large assets, thin deposits. The asset allowance or assets-only path may suit better than a statement run. The allowance divides liquid assets by 36 months when pre-asset debt-to-income is at or below 60%, by 60 months above that, and by 84 months for standalone use or any loan above $3,500,000. The 60% test only picks the divisor. The final ratio still has to fit the 50% ceiling.
Property type. Warrantable condos run to 85% and non-warrantable to 80%. Two-to-four unit properties run to 85%. Second homes are one unit only. Rural property is capped at 80% on ten acres or less and never above $3,000,000. Texas 50(a)(6) home-equity loans take a 5-point LTV reduction and stop at $3,000,000 on the portfolio program.
Building versus buying. A contractor financing a purchase is a different file from a contractor building. This article covers purchase and refinance underwriting. Ground-up construction is a separate conversation.
Key Terms Defined
Conforming limit: The county-by-county loan cap that sets what Fannie Mae and Freddie Mac may buy.
Non-QM: A mortgage that falls outside the qualified-mortgage box but still verifies the income or assets the lender relies on.
Expense ratio: The percentage removed from business deposits to account for the cost of running the business.
Reserves: Liquid funds, counted in months of the housing payment, that stay available after closing.
DSCR: A rental-property ratio that compares rent to the full monthly obligation.
Seasoning: The time that must pass after a credit event or a purchase before a lender will count it as cleared.
What the Decision Looks Like in Practice
Start with the property. If it is a home you will live in, you are on the personal-income side, and deposits are the lane. If it is a rental, price out the DSCR route first, because it keeps the debt off your personal ratio.
Then count the months. Strong recent deposits and a soft prior year point to 12 months. Steady income with seasonal swings points to 24.
Then check leverage against the loan, not the price. The bands are loan amounts. Multiply price by leverage first, then read the band that loan lands in. A buyer who targets a price near a band boundary can land in a very different cell.
Finally, clean the file. Separate personal and business spending where you can. Document every large deposit. Do not move money between accounts in the months a lender will read. Contractors who show up with consecutive statements, a written note on any dip, and proof of ownership give the reviewer fewer open questions. That does not guarantee approval. Every file is underwritten individually and programs change.
Lendmire’s piece on how to document a super jumbo self-employed mortgage lists what to gather.
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a broker that arranges financing through select lenders in its wholesale network, not a lender, and nothing here is a commitment to lend. Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Can a contractor get a super jumbo loan without traditional personal-income documentation?
Yes, through select wholesale programs. They read 12 or 24 months of personal or business bank statements instead, and qualify on documented income under the applicable program, subject to lender guidelines. The lender still verifies what it relies on, from the deposit record.
Is 12 or 24 months of statements better?
It depends on the shape of your income. Twelve months favors a strong recent year. Twenty-four months smooths seasonality or a single large job but pulls in older months.
Do 1099s count as income?
Not on their own. Lenders follow deposits, remove transfers, advances and refunds, and apply an expense ratio. A 1099 helps reconcile what landed in the account.
What if my business is new?
Options narrow. A short operating history is hard to document on deposits, so expect requests for proof of ownership and time in business. Assets may offer a stronger path, subject to underwriting.
Does a rental purchase use the same loan?
Usually not. A rental can be reviewed on rent coverage under a DSCR program instead of personal income, which keeps it off your personal debt-to-income. Select lenders in the network offer programs below 1.00 coverage, with leverage and terms adjusted.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Calculated Risk, FHFA conforming loan limit announcement
2. CFPB’s assessment of the ability-to-repay rule
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a Bank Statement Jumbo Loan Works in Santa Fe · How a Bank Statement Jumbo Loan Works in Vail · Can You Cross-Collateralize Properties on a Super Jumbo Mortgage?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.