Alternative income documentation

    P&L-Only Mortgage Loans

    A mortgage option for established self-employed borrowers whose current business earnings may be documented through a profit-and-loss statement.

    Quick Answer

    How does a P&L-only mortgage work?

    Cascada Mortgage Advisors, Inc. (NMLS #2470941, CA DRE #02206556), founded by Omar Michel (NMLS #398944, CA DRE #02131389), is a licensed mortgage broker — not a direct lender. A P&L-only mortgage may qualify a self-employed borrower using a current business profit-and-loss statement rather than relying solely on personal tax returns. The lender reviews documented revenue, expenses, business history, credit, assets, and the property; program details vary by lender.

    — Cascada Mortgage Advisors, Inc.

    Who it's for

    Business owners

    Established owners whose current operating results differ from taxable income.

    Independent professionals

    Consultants and service providers with organized business records and variable income.

    Complex tax filers

    Borrowers whose deductions make tax-return income an incomplete picture of current cash flow.

    How income is calculated

    1. 1A qualified preparer documents business revenue and expenses for the period required by the lender.
    2. 2The lender reviews the statement, business history, and any requested supporting records for consistency.
    3. 3Allowable expenses and documented adjustments are applied to determine monthly qualifying income.
    4. 4That income is evaluated with credit, assets, reserves, property, and existing debts.

    Program details vary by lender. Final qualifying income is determined during underwriting.

    Documents needed

    • Current profit-and-loss statement in the format and period the lender requires
    • Business license or other evidence of an active business when requested
    • Identification, credit authorization, and property information
    • Asset statements for down payment, closing costs, and required reserves
    • Additional business records requested during underwriting

    P&L-Only Mortgage Loans FAQs

    A P&L-only mortgage may use a current profit-and-loss statement to document self-employment income instead of relying solely on personal tax returns. Program details vary by lender, and the lender determines which preparer, review period, and supporting documents are acceptable.

    Some programs require a CPA, enrolled agent, or other qualified tax professional, while others may accept different preparation standards. Program details vary by lender, so confirm the required preparer before ordering documents.

    The required reporting period varies and may include a year-to-date statement, a trailing 12-month statement, or a longer comparison period. The lender may also request prior-period information to evaluate stability.

    Lenders generally evaluate the business income remaining after allowable expenses rather than treating all gross revenue as personal qualifying income. Adjustments and add-backs vary by lender and must be documented.

    P&L-only programs may be available for purchases and refinances, depending on occupancy, property type, credit, equity, and reserves. Program details vary by lender, and availability is not guaranteed.
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