The Quick Read: No single provider is the right fit for every commission earner, because the best match depends on how a lender reads your deposits, which accounts your commissions flow through, how much equity the property holds, and whether it is a primary home, second home, or rental. The useful comparison is documentation method and leverage limits, not company names. A broker that shops several wholesale lenders can match your file to the program that fits.
- Deposits, not the tax return, are the income proof on a bank statement line, and lenders usually review 12 to 24 months of them.
- A 1099 shows gross payments, not profit, so lenders still compare it against deposits and apply an expense factor.
- Leverage depends on occupancy: the network’s investment-property lines top out at 70% CLTV, while 90% CLTV exists only on primary and second homes at a 720 credit profile.
- Statements replace income proof only. Credit, equity, existing debts, title, and property type are still reviewed.
Key Terms Defined
CLTV (combined loan-to-value): Your first mortgage balance plus the new line, divided by the property’s value.
Expense factor: The share of business-account deposits a lender assumes went to business costs rather than personal income.
DTI (debt-to-income): Your monthly debts divided by your qualifying monthly income.
Lookback period: The number of months of statements a lender averages to estimate income.
Draw period: The stretch when you can borrow from the line and typically pay interest only, before repayment begins.
Portfolio product: A loan the lender writes to its own guidelines rather than to a standard that is sold on.
How large a line the equity supports.
An equity line is sized by combined loan-to-value, occupancy, and credit — not by rental coverage. Switch the occupancy or the credit band and the ceiling moves with it.
Investment-property lines require a 700 minimum credit score; second-home lines start at a 640 minimum and primary-residence lines at 600, and the combined-LTV ceiling steps down as the credit band drops on primary-residence and second-home lines and holds on investment-property lines; the line cap steps down on primary-residence lines and holds at every tier on investment-property and second-home lines.
A debt-to-income ratio above 45% requires 680+ credit. Profiles under 640 are limited to single-family homes. At least 75% of the approved line is drawn at closing. Ceilings, floors, and caps update from Lendmire’s centralized guideline source.
Line estimate
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. The rate is an editable assumption; equity-line pricing is variable through both the draw and repayment periods and never converts to fixed. Occupancy and credit drive the ceiling together: an investment property tops out at 70% combined LTV (minimum credit 700, line cap $500,000); a second home tops out at 90% combined LTV (minimum credit 640, line cap $500,000), with the ceiling stepping down as the credit band drops (the cap holds at every tier); a primary residence tops out at 90% combined LTV (minimum credit 600), and its $750,000 maximum line is available only at 75% combined LTV or below with a 700-or-better credit profile (720 on the longer-runway program) and a full appraisal. Lines above $500,000 require a full appraisal. Credit, debt-to-income, property type, and full underwriting review all affect the final line.
Why Do 1099 Commissions Look Smaller on a Tax Return Than in the Bank?
Commission earners often show less on paper than they earn. A tax-return file uses net income after business deductions. That gap can leave a self-employed borrower looking weaker on paper and push the debt-to-income ratio higher than the deposits alone would suggest.
A deposit-based lane closes that gap. Scotsman Guide describes bank statement loans as a way for self-employed borrowers to qualify on actual income rather than the tax-return figure, and it adds that these loans are not one-size-fits-all.
That last point matters for shopping. Two lenders can both say “bank statement” and still read your file very differently.
How Does Underwriting Treat Bank Statement Income, Step by Step?
Underwriting turns raw deposits into a monthly income number through a fixed sequence. The details vary by lender, but the order rarely changes.
1. Pick the documentation lane. The lender decides whether it accepts bank statements, 1099s, a profit-and-loss statement, a CPA letter, or assets.
2. Choose the account type. Statements can come from a personal account, a business account, or a combination, per Scotsman Guide. Keeping commission deposits in one business account makes it easier to separate income from personal activity.
3. Set the lookback. Non-QM bank statement programs commonly review 12 to 24 months of statements, according to Scotsman Guide. That is a market-wide range, and each lender picks its own.
4. Scrub the deposits. Underwriters remove transfers between your own accounts and one-time credits that are not income. Large unexplained deposits get questions.
5. Apply an expense factor on business accounts. The lender sets a flat percentage haircut that varies by program. A CPA letter or third-party P&L can sometimes support a lower one.
6. Average the result. The adjusted deposits are averaged over the lookback and compared to your monthly debts.
7. Review collateral and credit. Equity, CLTV, credit, the first-lien balance, title, and insurance all still apply.
On the network Lendmire works with, the debt-to-income ceiling is 50%, lowered to 45% for credit profiles from 600 to 679, so any ratio above 45% requires a 680 minimum. The line is qualified on the interest-only payment calculated on the maximum draw, so a large line weighs on the ratio even before you borrow from it. These figures are subject to lender guidelines and full file review.
What Does a 1099 Actually Prove?
A 1099-NEC shows gross payments from one payer. It does not show profit. Commissions paid to nonemployee salespeople are generally reported on that form, though a payer’s own classification of the worker determines which form is issued.
The reporting threshold has also changed. TaxBandits reports that the threshold rises from $600 to $2,000 for recent payments. Smaller or late payers may not issue a form at all, which leaves deposits as the only proof.
So a 1099 lane and a bank statement lane are different tests. A 1099 program reviews the file on the forms, often one or two years of them, sometimes with statements to confirm deposits. A bank statement program averages the deposits themselves. Some 1099-based programs apply a flat expense factor and some do not, which is one more reason to compare programs before applying.
Which Types of Providers Write These Lines?
Provider category tells you more than provider name. Each type tends to answer a different question, and the table lists what to ask each one. It names no companies on purpose.
| Provider type | Ask about | Watch for |
|---|---|---|
| Big banks, large retail lenders | Which income lanes they accept | Tax-return-only income reading |
| Credit unions | Membership and portfolio rules | Local limits on property type |
| Portfolio lenders | Deposit-based income, expense factor | Rules that differ lender to lender |
| Brokers with wholesale access | Which lender fits your file | Lines not written in your state |
Lendmire is a mortgage broker, not a lender. It arranges financing through select lenders in its wholesale network, and its DSCR footprint spans 41 markets, including Washington, D.C. The HELOC programs are narrower: they run in 16 full-service states (AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, WA). Whether a particular program accepts deposit-based income is something to confirm at the start, before a credit pull.
What Do These HELOC Programs Allow?
Leverage on these lines depends on occupancy, so no single ceiling describes them all. These ranges reflect select wholesale-network guidelines and are subject to lender guidelines and full file review. They are not a commitment to lend.
| Occupancy | Top CLTV | Credit needed | Max line |
|---|---|---|---|
| Primary residence | 90% at 720+ | 600 minimum | $500,000 at 90% CLTV; $750,000 at 75% CLTV, 700+ (720 on the longer-runway program) |
| Second home | 90% at 720+ | 640 minimum | $500,000 |
| Investment property | 70% | 700 minimum | $500,000 |
The 90% ceiling exists only at a 720-or-better profile, and only on lines up to $500,000. On a primary residence, a line above $500,000 caps at 75% CLTV, requires a full appraisal, and needs a credit profile of 700 or better (720 on the five-year-draw structure described below). Lower credit tiers step the ceiling down on a primary residence, with each lower score band carrying a lower maximum CLTV.
Structure comes in two forms. Primary residences and second homes can choose a 3-year interest-only draw with a 17-year repayment, or a 5-year draw with a 25-year repayment. Investment lines use the 5-year draw and 25-year repayment structure only. At least 75% of the line is drawn at closing, and pricing floats through both periods without converting to fixed.
Lines at or below $500,000 ordinarily use an automated valuation instead of a traditional appraisal. A borrower may still request a full appraisal.
Where the General Rule Breaks
The standard path assumes a clean file. These cases do not follow it.
Thin history. A newly self-employed commission earner is the typical difficult file. Lenders often look for about two years of self-employment, and the Federal Register preamble treats two years as the point where self-employment income is considered stable. That test comes from closed-end mortgage rules, not from these lines, so each lender sets its own history requirement.
Falling deposits. A strong twelve-month average with a weak final quarter can read as a risk, because the average hides the direction of the deposits.
Mixed income. Lenders can combine traditional employment income with self-employment income. A commission earner with a salaried spouse may qualify on the combined picture.
Title held by an entity. These lines require title held by the individual borrower or a revocable living trust. An LLC, corporation, partnership, or irrevocable trust cannot hold title. If a rental already sits in an LLC, the owner needs a vesting change, or a DSCR cash-out refinance may fit better, subject to program terms.
Property type. Single-family, 2-4 unit, PUD, townhome, and condominium properties can qualify. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not offered.
Portfolio size. A borrower is limited to three lines, and an owner of more than 15 financed properties is not eligible.
Credit history. A bankruptcy needs 4 years of seasoning from discharge or dismissal. Foreclosure-family history splits by program. One program accepts a foreclosure after 7 years and a deed-in-lieu or short sale after 4, while the other declines this history regardless of age.
A Worked Example With Illustrative Deposits
Picture a real estate agent paid by commission through a single business account. Twelve months of statements show uneven deposits, with a heavy spring and a quiet winter. Two of the months include transfers from a personal savings account, and one includes a refund from a vendor.
The underwriter removes the transfers and the refund first. The remaining deposits are totaled and the lender’s expense factor is applied. The result is divided by twelve, or by the full lookback if it runs longer.
Two things then happen. The average smooths the lumpy months, which helps. A weak final quarter is reviewed as a trend, which can hurt. The resulting monthly income is compared to existing debts and to the line’s payment, calculated on the interest-only payment at the maximum draw. All figures here are illustrative and not tied to any lender’s actual method.
How Do Federal Rules Treat a HELOC?
The federal ability-to-repay rule largely leaves HELOCs out. The CFPB’s Regulation Z text lists the loans it covers, and a home equity line subject to the home-equity-plan section is excluded.
In practice, no federal rule dictates which documents prove income on a HELOC. Each lender sets its own method. The same rule bars structuring a loan as open-end credit just to evade closed-end requirements, so a loan documented as a HELOC that is not truly open-end can be treated as closed-end.
There is one edge for investors. When a HELOC sits on the same home as a new first lien, the first-lien lender must count the HELOC payment. That matters if you pair a line with a purchase or refinance. Whether a line on a rental falls under these consumer rules also depends on the business-purpose analysis, so it varies by purpose and lender.
Questions to Ask Before an Application
A credit pull is the cost of finding out you chose the wrong program. These questions help avoid it.
- Do you accept deposit-based income or 1099s, and for how many months?
- Do you accept personal accounts, business accounts, or a mix?
- What expense factor applies, and can a CPA letter lower it?
- How is CLTV calculated, and what is the ceiling for my occupancy type?
- Can an entity hold title, or does the property need to be in my name?
- Does the draw structure suit variable income? Interest-only payments can be easier in a slow quarter, but repayment still comes.
Before applying, keep personal and business deposits separate where possible. Document any large deposit. Gather the 1099s from every payer and reconcile them to the statements.
When DSCR Is the Better Tool
If a rental’s own income can carry the loan, a DSCR loan may fit better than any personal-income lane. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines, and personal deposits are not the test. A 1099 earner buying a rental should see how the complete DSCR loans guide describes that path.
The decision runs in three steps. If the rental’s income qualifies, DSCR applies. If your personal income qualifies, a bank statement or 1099 lane applies. If neither fits, an equity-based approach may work.
Remember also that clearing a coverage ratio is not the same as positive cash flow. Repairs, vacancy, management, and capital expenses sit outside that calculation.
Next Steps
If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. The bank statement HELOC page explains how deposit-based income fits into that comparison.
This article is general information, not legal or tax advice. Consult a qualified attorney or CPA about your own situation.
Frequently Asked Questions
Does a bank statement HELOC mean no income proof?
No. The statements are the proof. Lenders average deposits, remove transfers and non-income credits, apply an expense factor, and still review credit, equity, debts, and the property. Qualification runs on documented income under the applicable program, subject to lender guidelines.
How long do I need to be self-employed?
It varies by lender. Many look for about two years, and Scotsman Guide reports that bank statement programs commonly review 12 to 24 months of statements. A shorter history is the usual reason a commission file runs into trouble, so ask each lender for its own requirement.
Can I use a bank statement line on a rental property?
Sometimes. On the network’s programs, an investment-property line needs a 700 credit profile, tops out at 70% CLTV, and caps at $500,000. Title must be held personally or in a revocable living trust, so an LLC-held rental needs a vesting change first.
Why does a 1099 not settle the question by itself?
It shows gross payments from one payer, not profit, and small payers may not issue one. Lenders compare 1099s against deposits and apply their own expense factor. With several payers, the totals should reconcile to your statements.
What if a bank statement line does not fit my file?
The fallback depends on what you are financing. If a rental’s income can carry the payment, a DSCR loan is a separate path. If you own the property outright or have a large first mortgage balance, a cash-out refinance may compare better.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage that arranges home equity lines of credit through wholesale lending partners in its 16 full-service states. Lines on primary residences, second homes and investment properties are each reviewed individually by the lender under the program’s occupancy, credit and combined-loan-to-value guidelines. 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. Scotsman Guide, Don’t Shut the Door on Quality Borrowers
2. Scotsman Guide, Set Yourself Apart
3. TaxBandits
4. Federal Register, Ability-to-Repay and Qualified Mortgage Standards
5. CFPB, Regulation Z § 1026.43
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Can You Borrow on a Bank Statement HELOC When Switching Banks? · Top Bank Statement HELOC Providers Without Tax Returns or Full Income Documentation · How to Get a Bank Statement HELOC When a Lis Pendens Is on Your Title
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.