Self-Employed & Bank Statement Loans in MassachusettsChris Galli & The Galli Team
Yes, you can buy or refinance in Massachusetts when you're self-employed. Most owners qualify one of two ways: a conventional loan that averages two years of tax returns (with write-offs like depreciation added back), or a 12- or 24-month bank statement loan that uses your deposits instead. We run your numbers both ways before you apply.
Answer a few quick questions and a loan officer will map your best self-employed options.
Prefer to talk? Call 941-529-1040 or book a call.
Who counts as self-employed when you apply for a mortgage?
Under Fannie Mae's guidelines, you're treated as self-employed if you own 25% or more of a business. That covers contractors and trades, small business owners with sole proprietorships, LLCs or S-corps, 1099 and gig workers, and commission-based real estate agents. Chris Galli, Region Manager at Novus Home Mortgage, and The Galli Team help self-employed buyers across Worcester, MetroWest and Central Massachusetts from our office at 8 Norwich St, Worcester, MA 01608, and we lend in all 50 states. Want the full program guide? See our bank statement loans page.
How do self-employed borrowers qualify for a conventional mortgage?
Two years of returns
Lenders generally want your signed personal federal returns, all schedules, for the most recent two years, plus business returns when they apply.
Sometimes just one year
One year of personal and business returns can be enough if the business has existed for at least five years and you've owned 25% or more of it for those five years.
Income is averaged
Stable or rising income is generally averaged over the period. If income is declining, an underwriter looks harder, and a decline can lower the amount used.
A cash flow analysis
Your returns are worked through Fannie Mae's Cash Flow Analysis (Form 1084) or an equivalent tool to arrive at qualifying income.
Some write-offs come back
On Schedule C, recurring non-cash items are added back to income: depreciation, depletion, business use of your home, and amortization and casualty losses.
Most write-offs still count
Mileage you actually drove, supplies, phone and marketing still reduce qualifying income, and meals and entertainment exclusions are subtracted. A strong year can look thin on paper.
How does a 12- or 24-month bank statement loan work?
A bank statement loan is a non-QM (non-qualified mortgage) program. Instead of your tax returns, the lender reviews 12 or 24 months of statements, totals your eligible deposits and turns them into an average monthly income.
Personal statements
Deposits into your personal account are often counted at or near full value, because business expenses are assumed to be paid before money reaches you. Expect questions about large or unusual deposits.
Business statements
Business deposits are reduced by an expense factor. Programs commonly use a set percentage that can vary by business type, or a lower figure supported by a CPA or tax-preparer letter or a P&L.
What doesn't count
Transfers between your own accounts, refunds and loan proceeds generally aren't treated as income. Programs typically look for about two years of self-employment history.
Compare the total cost
Down payment, credit and pricing requirements are usually different from a conventional loan, so we compare total cost on your file, not just whether you're approved.
How can write-offs change your qualifying income?
Same business owner, two ways to qualify. Two years of Schedule C net profit totaling $110,000, plus $18,000 depreciation and $6,000 home office, compared with $240,000 of business deposits over 12 months at a 50% expense factor. Your numbers, program and expense factor will differ.
| Net profit + add-backs (2 years) | $134,000 |
| Conventional: ÷ 24 months | $5,583/mo |
| Deposits × 50% (12 months) | $120,000 |
| Bank statement: ÷ 12 months | $10,000/mo |
What if I'm a 1099 worker, gig driver or real estate agent?
Bank statements aren't the only alternative. These are programs available through our lending partners, confirmed on each file:
1099-only (non-QM)
Uses your 1099 forms instead of full tax returns. A fit for independent contractors, consultants and commission-based agents.
P&L-only (non-QM)
Uses a profit-and-loss statement, typically prepared or reviewed by a CPA or tax preparer, as the income source.
Asset-based (non-QM)
Qualifies you from liquid assets like savings, investment or retirement accounts rather than monthly income. Often used by owners who've sold a business or retired early.
DSCR for investors
Buying a rental? A DSCR loan qualifies on the property's rent, not your personal income. See DSCR investment loans.
What should Massachusetts S-corp and LLC owners know?
S-corp owners
You usually show two income streams: the W-2 wages you pay yourself, plus your share of business income on a K-1. Lenders may also review the business return (Form 1120-S).
LLCs & partnerships
Multi-member LLCs and partnerships report through a K-1 and Form 1065. Single-member LLCs usually show up on your Schedule C.
Write-offs are a trade-off
Every extra deduction lowers both your tax bill and your qualifying income. If you plan to buy in the next year or two, talk with your CPA and with us before you file.
Buying a triple-decker?
Owner-occupied two- to four-family homes are common around Worcester, and rent from the other units can help you qualify. See our Worcester mortgage lender page.
Conventional path documents
Two years of signed personal returns with all schedules, business returns (1120-S or 1065) and K-1s if applicable, a year-to-date P&L if requested, proof of the business, two recent months of bank statements and photo ID.
Bank statement path documents
12 or 24 consecutive months of statements (all pages), proof of self-employment, a CPA letter or P&L if supporting a specific expense factor, notes on large deposits, asset statements and photo ID.
More ways we can help
Do my write-offs cost me more qualifying income than a bank statement loan would?
Enter your own numbers. The first group works out a simplified conventional figure from your Schedule C. The second works out a bank statement figure from your deposits and an expense factor you choose. Nothing you enter is saved or sent anywhere.
The expense factor box is left blank on purpose. Business statements commonly use a set percentage, or a figure supported by a CPA or tax-preparer letter. Personal statements are often counted with no expense factor, so enter 0.
This is a simplified illustration, not a loan approval or an underwriting decision. Real qualifying income also depends on income trends, other add-backs or deductions, business returns, K-1 income, credit, assets and the specific program. Bank statement programs are non-QM and are confirmed on each file. All loans subject to credit approval.
I've been in this industry for over 29 years, and I started The Galli Team for one reason: too many good people were being told "no" by lenders who didn't know how to structure their deal.
Self-employed borrowers feel that more than anyone. Contractors, salon and shop owners, S-corp owners, 1099 consultants and real estate agents across Central Massachusetts often earn more than their tax returns show. Our Worcester office team reads your returns, your statements or both, and shows you which path gives you the most buying power before you apply.
Why self-employed buyers choose us over big banks
Most lenders read your tax returns and stop there. We look at every way your income can count.
| Big Banks & Online Lenders | The Galli Team ✦ | |
|---|---|---|
| Response time | 24 – 72 hours | Within 2 hours |
| Runs your income both ways (returns and statements) | ✗ | ✓ |
| 12- & 24-month bank statement loans | ✗ | ✓ |
| 1099-only, P&L-only & asset-based options | Rarely | ✓ |
| DSCR / investor loans | ✗ | ✓ |
| Denied because of write-offs? | No second look | We restructure your file |
| Buying in Massachusetts and Florida | Two different lenders | One team, both states |
| Lending states | Varies | All 50 states |
Don't take our word for it.
Real people. Real loans. Real results.
"This is my 5th property purchase and the smoothest transaction by far! I will be using Chris as my go-to mortgage lender from now on."
"Chris, Julie and Rosa were very helpful purchasing my vacation home in Florida. Available all hours. Will definitely use them again!"
"Chris and his team were great to work with. Always available, kept us updated throughout. We closed early with no surprises. Highly recommend!"
Self-employed mortgage questions, answered.
No vague answers. We explain exactly how your income is counted before you ever fill out a form.
Get My Free Loan Plan →Sources: Fannie Mae Selling Guide B3-3.2-01 (self-employed documentation) and B3-3.6-03 (Schedule C add-backs); Fannie Mae Form 1084 Cash Flow Analysis. Bank statement program features vary by lender and are confirmed on each file. Checked October 2026; guidelines change.
See your real numbers, both ways.
Send us your returns or statements and Chris and our Worcester office team will show you which path gives you the most buying power.
Answer a few quick questions and a loan officer from our Worcester office team will map your best self-employed options.