Quick answer (October 2026): Two kinds of mortgage can qualify a borrower without tax returns in 2026. A DSCR loan (debt service coverage ratio: the rent divided by the payment) skips personal income and qualifies a rental property on its own rent. A bank statement loan qualifies self-employed income from 12 or 24 months of deposits, reduced by an expense factor. The federal ability-to-repay rule lists financial institution records among its examples of acceptable proof of income.
Many Las Vegas business owners have strong deposits, a healthy pipeline and a tax return that shows almost none of it. That is not an accident. Write-offs exist to lower taxable income, and they do. The cost shows up later, when a lender asks for two years of returns. A no tax return mortgage solves that mismatch. This guide covers the two lanes that matter: bank statement loans for the home you live in, and DSCR loans for the rentals you own. You will find the math lenders commonly run, a comparison table against full documentation, and an estimator you can test with your own numbers.
Key takeaways
- Bank statements are legitimate income proof. The federal ability-to-repay rule requires third-party verification, and its own example list includes financial institution records. Non-QM does not mean no rules.
- The expense factor is the whole game. On business statements, lenders commonly count deposits minus 40 to 60 percent for expenses. That one assumption moves your qualifying income more than anything else.
- DSCR is for rentals only. A DSCR loan qualifies the property on rent over PITIA (principal, interest, taxes, insurance and any HOA dues) and can never finance a home you intend to live in. Federal rules classify it as business-purpose credit.
- Full documentation still wins when it works. Fannie Mae's self-employed rulebook is strict, but agency loans commonly price below non-QM loans, though your own pricing depends on your file. Check that path before you pay for flexibility you do not need.
- Common ranges, not offers. 12 or 24 months of statements and mid-600s credit are market ranges, not one program's rule sheet.
Self-employed and not sure which path fits?
Tell us how your business gets paid and what you want to buy. A loan officer can walk through bank statement, DSCR and full-document options for your situation. It is not a loan decision, a rate quote or a commitment to lend.
Talk to a loan officerCan you get a no tax return mortgage in Las Vegas?
A no tax return mortgage comes from a loan family called non-QM (short for non-qualified mortgage). It exists for income that tax returns describe badly. Three paths cover almost every file we see. First, the bank statement loan, which proves income from deposits instead of returns. Second, the 1099 loan, a close cousin that uses 1099 forms for contractors and commission earners. Third, the DSCR loan, which ignores personal income and qualifies a rental property on its own rent.
None of this is a loophole. For a home you will live in, federal law still applies in full. The ability-to-repay rule in Regulation Z says the lender must check your income with reliable records from a third party. The rule then lists examples of those records. Item four on the list is financial institution records, which includes bank statements. Here is the rule's own wording:
“Examples of other records the creditor may use to verify the consumer's income or assets include: ... (iv) Financial institution records”Regulation Z, 12 CFR 1026.43(c)(4), Consumer Financial Protection Bureau
This rule took effect in 2014, after the 2008 crisis, to stop loans made on unchecked income. Yet it lets bank statements serve as income proof. What changed is how income gets proven, not whether it gets proven. The lender must still document, calculate and defend a good-faith finding that you can afford the loan.
The trade-off is what you would expect. Because the review is done by hand and the paperwork is unusual, non-QM pricing commonly sits above agency pricing. Down payment floors commonly sit higher too.
That is why the honest first step is checking whether you need this lane at all. Our full-documentation self-employed mortgage guide covers that check. If two years of returns qualify you, agency loans commonly price below non-QM loans, though your own pricing depends on your file.
How does a bank statement loan work?
A bank statement mortgage swaps tax returns for 12 or 24 months of your actual bank statements. The underwriter (the lender's reviewer who checks the file) reads every month and adds up the deposits that count. Then those deposits become a monthly qualifying income. Everything else about the mortgage keeps a normal shape. The home can be your primary residence, and you pay the loan down on a normal schedule. Your debts still count against your income. Only the income proof changes.
Personal versus business statements
Programs commonly split into two paths. With personal statements, you show 12 or 24 months of the personal account where your business pays you. Deposits from the business commonly count at or near full value. The business already paid its costs before it paid you.
With business statements, you show the account where revenue lands. Revenue is not profit, so the underwriter applies an expense factor. That is a share of deposits assumed to go back out as business costs. Across the 2026 market that factor commonly runs 40 to 60 percent, with 50 percent as the standard default. Many programs will accept a lower factor. A letter from your CPA or tax preparer, or a prepared profit and loss statement, commonly supports one for your industry.
Which deposits count
Underwriters do not count everything that hits the account. Transfers between your own accounts are left out, because moving money is not earning it. So are loan proceeds, tax refunds and large one-off deposits you cannot source (show where they came from).
Pay from your business into your personal account is different. On personal statements, it is the income being counted.
| Deposit | How it is commonly treated |
|---|---|
| Customer payments and sales into the business account | Counted, then reduced by the expense factor (business statements) |
| Pay from your business into your personal account | Counted at or near full value (personal statements) |
| Transfers between your own personal or savings accounts | Left out: moving money is not earning it |
| Loan proceeds | Left out |
| Tax refunds | Left out |
| Large one-off deposits you cannot source | Left out unless you can show where the money came from |
Consistency matters as much as the total. A steady pattern across all 12 or 24 months reads as lasting income. Three giant months and nine empty ones invite questions, and falling deposits invite harder ones. Expect the underwriter to check the business itself too. A license, a CPA letter or a secretary of state filing commonly shows two years of self-employment.
Not sure which statement path fits your deposits?
Tell us about the business and the home you want. A loan officer can walk through which statement path may fit and how common conventions would treat your deposits. It is not a loan decision, a rate quote or a commitment to lend.
Talk to a loan officerHow much income do your bank statements show?
Bank statement mortgage math is short enough to run at a kitchen table. Add the deposits that count across the statement period, then divide by the number of months. Then take off the expense factor. What remains is the monthly income the file qualifies on.
Qualifying income = (eligible deposits ÷ months) × (100% minus the expense factor)
Suppose a Las Vegas contractor's business account shows $480,000 of eligible deposits across 24 months:
Average deposits: $480,000 ÷ 24 = $20,000 per month
Apply a 50% expense factor: $20,000 × 0.50 = $10,000 per month of qualifying income
Now look at the same business through its tax return. After cash expenses like supplies, fuel, payroll and repairs, Schedule C line 31 shows $78,000 of net profit. None of those deductions is the kind Fannie Mae adds back:
Full-doc qualifying income: $78,000 ÷ 12 = $6,500 per month
Same business, same year, and the bank statement lens shows $3,500 more monthly income than the tax return lens. That gap is the entire reason this product exists.
One caution: Fannie Mae adds some non-cash deductions back to Schedule C income, including depreciation, depletion, business use of a home, amortization (a cost spread over several years) and casualty losses. If much of your write-off is depreciation, run the full-documentation math before you assume the tax return loses.
Every figure above is an illustration of the arithmetic, not a quote, a rate, an approval, or a commitment to lend.
Try the math on your own deposits
Bank statement income estimator
Educational tool. It does math on the numbers you enter, using common market conventions. It is not a quote, an approval, an offer of credit or any program's actual calculation. This tool does the arithmetic in your browser and does not send your figures to us unless you submit the form below. A blank expense factor uses the 50 percent default.
Why the expense factor deserves a fight
Every point of expense factor is a point of income. In the example above, moving from 50 percent to 40 percent lifts qualifying income from $10,000 to $12,000 a month. So one of the most useful hours you will spend on this loan is the one where your CPA documents your real expense ratio.
| Expense factor | Treated as business costs | Monthly qualifying income |
|---|---|---|
| 30% | $6,000 | $14,000 |
| 40% | $8,000 | $12,000 |
| 50% | $10,000 | $10,000 |
| 60% | $12,000 | $8,000 |
A service business with no inventory and no payroll can commonly justify a factor well below the default. A trucking company usually cannot. Bring the letter before underwriting, not after.
When is a DSCR loan the better no-tax-return option?
For a Las Vegas rental, stop documenting yourself and let the property carry the file. A DSCR loan divides the property's monthly rent by its full monthly payment, called PITIA, and lends on that ratio.
Your tax returns stay out of the file, just as with a bank statement loan. So do your bank statements, your job and your personal debt-to-income math. We wrote a full pillar on how DSCR loans qualify Las Vegas rentals on rental income, so this section stays short.
The legal line between the two products is occupancy (whether you live in the home). Federal rules treat credit to buy, improve or maintain a rental the owner does not live in as business-purpose lending, outside the consumer rulebook. The official interpretation of Regulation Z even draws the line in days. Expect to live in the property more than 14 days in the coming year, and it cannot be treated as non-owner-occupied.
So the sorting rule is simple. The home you live in needs a consumer loan, and the bank statement loan is the no-tax-return version of one. The rental you own can use a DSCR loan. For programs, timelines and paperwork, our DSCR loan desk for Las Vegas investors covers the application side. Misstating occupancy to get a loan can be fraud.
Bank statement vs DSCR vs full documentation: which fits?
Each mortgage path is in one table below. The full-doc column follows Fannie Mae's current self-employed rules, section B3-3.5-01 of its Selling Guide. The other two columns describe common 2026 non-QM market conventions. Read every non-QM row as a range you will commonly see, never as Valley West's offer.
| Factor | Bank statement loan | DSCR loan | Full documentation (agency) |
|---|---|---|---|
| Income proof | 12 or 24 months of deposits | None: property rent ÷ PITIA | Commonly two years of signed federal tax returns or IRS transcripts; one year can be enough for a business owned 25% or more for five years |
| Who it measures | You, through your cash flow | The property only | You, through taxable income |
| Occupancy allowed | Primary, second home, investment | Investment only, never primary | Primary, second home, investment |
| Self-employment history | Commonly 2 years | Not applicable | Generally 2 years; under 2 years possible when the most recent signed returns show a full year from the current business and a prior history in the same line of work at the same or higher income |
| Down payment (purchase) | Commonly larger than agency loans | Commonly the largest of the three | Commonly the smallest of the three on a primary home |
| Credit floor | Commonly mid-600s | Commonly 660 to 680 | Fannie Mae: no set minimum on loans run through its automated underwriting (DU); 620 on manually underwritten fixed-rate loans. Lenders may set their own floors. |
| Personal DTI (debt-to-income ratio) computed | Yes, on the statement income | No | Yes, on the return income |
| Write-offs hurt you | No: deposits, not net profit | No: rent, not your income | Partly: qualifying starts from net profit, but depreciation and some other non-cash deductions are added back |
| Pricing | Commonly above agency | Commonly above agency | Commonly priced below non-QM when you qualify |
The honest decision rule
Start at the right-hand column and work left. Fannie Mae calls you self-employed at a 25 percent or greater ownership interest. It generally wants a two-year earnings history, and qualifying starts from the income your returns actually show. If that math works, take it, because the agency path is commonly simpler and lower priced for borrowers who qualify.
Move to bank statements when write-offs gut the return but the deposits are strong. Move to DSCR when the property is a rental and you would rather not document yourself at all. The wrong choice is usually paying non-QM pricing for a file that agency underwriting would have approved.
One thing this table does not cover is the taxpayer number you file under. Filing with an ITIN (an IRS tax number for people who cannot get a Social Security number) can change which programs are open to you. It does not change whether your income can be documented. Read how ITIN filers are treated.
There is a third route worth knowing if your wealth sits in savings and investments rather than income: qualifying from assets instead of income.
What do lenders still verify without tax returns?
Almost everything else on the mortgage file. No tax returns does not mean no underwriting. On a consumer file, the ability-to-repay rule makes the lender consider eight separate factors, from income to credit history. Expect a full credit report, every monthly debt and a debt-to-income check built on the statement income.
An appraisal and sourced down payment funds round out the file. Reserves (months of payments left in the bank) commonly matter more here than on agency files. They help offset the unusual income proof.
Reserves also grow with the number of financed homes you already own, and on agency files they grow in steps rather than smoothly. Read up on that before a fourth or fifth purchase. Often it is what happens when you run out of conventional slots that decides how the next one gets structured.
Expect the deposits themselves to be questioned too. Underwriters leave out transfers between accounts, ask about one-off spikes and read a falling trend as a risk sign. Our guide to how a mortgage file gets verified before closing walks through that review.
The statement review takes time, so do it before you shop. A preapproval built on your actual deposit history can make your offer stronger with a listing agent. For a refresher on the ratio the lender still computes, see how debt-to-income is measured on a consumer file.
Why is this such a Las Vegas story?
Las Vegas paychecks do not look like W-2 America. This town runs on tips, commissions, gig work and small business. Think dealers and servers, entertainers between contracts, agents on commission and contractors of every trade.
Much of that work is paid on 1099s rather than W-2s, and many 1099 earners take every write-off the tax code allows. The result is a city full of borrowers whose lifestyle says qualified and whose Schedule C says otherwise.
The 1099 path deserves its own note. Contractors with steady 1099s commonly have a middle path. Some programs qualify from the 1099 forms plus year-to-date earnings, skipping both the tax return and the statement review. Our conventional-side team keeps a full walkthrough of the 1099 route to a Las Vegas mortgage if that fits your income. The right path is a question of fit, not a ranking.
Valley West takeThe bank statement files that struggle are often not short on income. They are short on preparation. A borrower walks in with strong deposits, but half are transfers from savings. The business license is eight months old. Nobody has asked about the expense factor.
So use this order instead. Pick one account where income really lands and stop mixing other money into it today. Then get your CPA's expense letter early, and count only deposits you can source. Do that, and the statement file can read more cleanly. Valley West Mortgage is a Las Vegas lender. Check our current state licenses in NMLS Consumer Access. You can talk through your statement path with a loan officer before you decide anything.
Shopping in Spring Valley? See our Spring Valley, NV mortgage lender page.
Frequently asked questions
What is a no tax return mortgage?
Any mortgage where the lender documents your ability to repay without using tax returns. The two main types in 2026 are bank statement loans and DSCR loans. The first qualifies you from 12 or 24 months of deposits. The second qualifies a rental property from its own rent. Both are non-QM products with full underwriting; only the income paperwork changes.
How many months of bank statements do lenders want?
Commonly 12 or 24 months, from either a personal or a business account. Twenty-four months commonly reads stronger because it shows a longer pattern, and some programs price better for it. Every month in the window gets reviewed, so consistency across the whole period matters as much as the total.
Do bank statement loans cost more than regular mortgages?
Commonly yes. Non-QM pricing generally sits above agency pricing because the analysis is manual and the loans stay outside the qualified mortgage framework. That is a market convention, not a quote. It is also why we check the full-documentation path first: when your returns qualify you, agency loans commonly price below non-QM loans, though your own pricing depends on your file.
Who fits, and who does not
Can a W-2 employee get a bank statement loan?
The product is built for self-employed borrowers, business owners, and independent contractors, and programs commonly require about two years of self-employment. A W-2 employee almost never needs it: paystubs and W-2s already document W-2 income, and agency pricing is commonly better. Mixed-income households can pair one borrower's W-2 with the other's statements.
What credit score do you need for a bank statement loan?
Floors commonly start in the mid-600s across the 2026 non-QM market, with stronger terms as scores rise, and some programs reach lower with more down payment. Like every range on this page, that describes the market generally, not one program's rule sheet.
DSCR and 1099 questions
Can I use a DSCR loan to skip tax returns on my own home?
No. DSCR loans are business-purpose loans on non-owner-occupied investment property. Under Regulation Z's official interpretation, occupying more than 14 days in the coming year makes the property owner-occupied. For the home you live in, the bank statement loan is the no-tax-return path. Misstating occupancy can be fraud.
Do 1099 contractors need tax returns to get a mortgage?
Not necessarily. Contractors commonly have three paths: full documentation from returns, a 1099-only program that qualifies from the 1099 forms plus year-to-date earnings, or a bank statement program. Which one wins depends on how much the write-offs distort the return versus the deposits.
The bottom line
A no tax return mortgage is not exotic anymore. The ability-to-repay rule itself names financial institution records as valid income proof, and a whole non-QM market has grown up around that sentence. For the lender-side view of which route fits which file, see our non-QM lender in Las Vegas page.
So the real work is sorting, not searching. Buying or refinancing the home you live in with strong deposits and a lean tax return: that is a bank statement file. Financing a Las Vegas rental: that is commonly a DSCR file, qualified on the property's own rent. Tax returns that still show enough income: take the agency path, which commonly costs less when you qualify. Get the path right first, and everything after it gets easier, from the expense factor to the closing date.
Want your statement path checked before you shop?
Tell us what you are buying and how your business gets paid. A loan officer can walk through which path may fit and what documents to gather. It is not a loan decision, a rate quote or a commitment to lend.
Talk to a loan officerTalk to a Valley West specialist
Sources
- 12 CFR § 1026.43(c), Regulation Z, the ability-to-repay rule. Paragraph (c)(3) requires reliable third-party records. Paragraph (c)(4) lists income records, including “(iv) Financial institution records”: ecfr.gov
- Consumer Financial Protection Bureau, Regulation Z § 1026.43 and its official interpretations, ability-to-repay and qualified mortgage standards: consumerfinance.gov
- 12 CFR § 1026.3(a), Regulation Z, exempt transactions. Credit mainly for a business or commercial purpose is exempt. The official interpretation (comment 3(a)-4) treats credit to acquire, improve or maintain a rental the owner does not live in as business purpose. It also sets the 14-day occupancy line: ecfr.gov · consumerfinance.gov
- Internal Revenue Service, Schedule C (Form 1040), Profit or Loss From Business. Line 31 is net profit or loss. Depreciation and section 179 deductions reduce it: irs.gov
Agency guideline sources
- Fannie Mae Selling Guide B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower. A 25% or greater ownership interest is self-employment. A two-year earnings history is generally required. A limited exception applies when the most recent signed personal and business returns show a full 12 months of income from the current business. The file must also show prior income at the same or greater level in the same field. Income is checked with signed federal tax returns or IRS transcripts: fanniemae.com
- Fannie Mae Selling Guide B3-5.1-01, General Requirements for Credit Scores. A minimum credit score is not required for DU loan casefiles. Manually underwritten loans need 620 (fixed-rate) or 640 (ARM): fanniemae.com
- Fannie Mae Selling Guide B3-3.6-03, Income or Loss Reported on IRS Form 1040, Schedule C. Depreciation, depletion, business use of a home, amortization and casualty losses are added back to Schedule C cash flow: fanniemae.com
Across Valley West: Compare our other loan program resources. Self-employed and investor lending lives in the self-employed and investor library on our conventional loan site. Buying with a military benefit instead? Visit our VA home loan guide for Nevada military families. VA loans are government-backed, not government-issued. Valley West Mortgage is not affiliated with or endorsed by the U.S. Department of Veterans Affairs, HUD or the FHA.
Keep reading
- InvestorsDSCR loan requirements in 2026The rent-over-PITIA math and the ranges investors commonly meet.
- QualifySelf-employed mortgage guideThe full-documentation path when your returns still work.
- Get readyMortgage preapproval, explainedWhy the letter matters and what lenders verify to issue one.
- QualifyWhat underwriters actually checkThe conditions that decide whether you close on time.
Last updated: October 25, 2026. The federal rules and sources on this page were re-checked on that date.
