P&L HELOC and Second Mortgage Loans

Home Equity Financing for Self-Employed Homeowners

Eligible self-employed borrowers can qualify for a home equity line of credit (HELOC) or a closed-end second mortgage using a profit and loss statement. With P&L-only qualification, you don’t need bank statements for this income documentation option.

Program Highlights

• 12- or 24-month P&L for income qualification
• No bank statements required
• Up to 80% combined loan-to-value (CLTV)
• Minimum 740 FICO score
• At least two years of self-employment
• Minimum 50% business ownership

P&L HELOC

A HELOC provides a revolving line of credit secured by your home. During the draw period, you can access funds as needed within your approved limit, subject to the loan terms. As you repay principal, you may be able to borrow again. A HELOC may be a good fit for renovations completed in stages or expenses that arise over time.

P&L Second Mortgage

A closed-end second mortgage provides a lump sum at closing, with repayment according to the loan’s agreed terms. This option may suit homeowners who know how much they need for a specific expense. Unlike a revolving credit line, repaying a closed-end second mortgage does not restore funds for additional borrowing. Both options let you access equity while keeping your existing first mortgage in place.

Who Is This Program For?

This program is for self-employed homeowners who own at least 50% of their business, have been self-employed for at least two years, and meet the program’s credit and equity requirements. Your 12- or 24-month profit and loss statement is used to evaluate qualifying business income. P&L-only qualification refers to the income documentation method; other application and property documentation still applies.

How Much Can You Borrow?

Financing is available up to 80% CLTV, subject to approval. CLTV compares your total mortgage debt, including your existing mortgage and the proposed HELOC or second mortgage, with your home’s value.

For example:

• Home value: $600,000
• Maximum total mortgage debt at 80% CLTV: $480,000
• Existing mortgage balance: $350,000
• Potential equity financing: $130,000

How It Works

• Tell us about your financing goals. Share the amount you need and whether you prefer a credit line or a lump sum.
• Review your eligibility. We evaluate your credit, self-employment history, business ownership, and available equity.
• Provide your P&L. Submit a 12- or 24-month profit and loss statement, along with other required application documents.
• Complete the loan review. The lender reviews your income, property, and application to determine eligibility and available terms.

Frequently Asked Questions

Do I need to provide bank statements? Bank statements are not required under this P&L-only qualification option. Other required loan documentation still applies.

What credit score is required? The program requires a minimum FICO score of 740.

How long must I have been self-employed? You must be self-employed for at least two years.

Do I need to own the entire business? No. The minimum business ownership requirement is 50%.

Can I keep my current first mortgage? A HELOC or closed-end second mortgage can be placed behind your existing first mortgage, allowing it to remain in place, subject to lender approval.

Which option should I choose? A HELOC may suit ongoing or uncertain expenses. A closed-end second mortgage may suit a defined expense for which you want a lump sum. We can help you compare available terms based on your goals.

Contact us for more information.