BANK STATEMENT
Loan Limits

A bank statement mortgage is a home loan designed for self-employed individuals or business owners who may not have the traditional income verification documents, such as W-2s or pay stubs. Instead, these borrowers can use their personal or business bank statements to demonstrate their cash flow and ability to repay the loan. These loans are especially popular among entrepreneurs, freelancers, and gig workers whose income may vary month to month. As with all mortgages, bank statement loans have specific limits and guidelines that borrowers should be aware of.

Key Factors Affecting Loan Limits

Lender Guidelines: Bank statement mortgage loans are typically offered by non-traditional or private lenders. Each lender will have its own set of rules regarding loan amounts, but most follow certain general guidelines. Unlike conventional loans, which are subject to strict Fannie Mae and Freddie Mac regulations, bank statement loans have more flexibility in their terms.

Down Payment: The loan limit you qualify for may be influenced by your down payment. In many cases, the more you can put down upfront, the higher your borrowing limit can be. Most bank statement mortgage lenders require at least a 15% down payment, but this can increase based on the size of the loan. For jumbo loans (those that exceed conforming loan limits), a down payment of 20% or more may be required.

Credit Score: Although bank statement loans are more flexible when it comes to income verification, credit scores still play a significant role. Borrowers with higher credit scores (typically 700 or above) may be eligible for larger loan amounts. Those with lower credit scores might face stricter limits or higher interest rates.

Debt-to-Income (DTI) Ratio: Lenders will assess a borrower’s DTI ratio to ensure they are not overleveraging themselves. Even though income is calculated differently for bank statement loans, the lender will still want to see that the borrower’s monthly debt obligations do not exceed a certain percentage of their income. Typically, a DTI ratio of 45% or lower is preferred, though some lenders may accept slightly higher ratios for bank statement loans.

Type of Bank Statements: Whether you use personal or business bank statements can also impact your loan limit. Business owners using business bank statements might need to provide additional documentation, such as a profit and loss statement, to give a more accurate picture of income. The lender will look at deposits over a 12- to 24-month period to determine qualifying income.

Maximum Loan Amounts

– Conforming Loan Limits:
Some lenders might offer bank statement loans that conform to standard loan limits set by the Federal Housing Finance Agency (FHFA). For 2025, the baseline conforming loan limit is expected to be around $806,500 for single-family homes in most parts of the U.S., with higher limits in high-cost areas like California, New York, and Hawaii. Bank statement loans that fall within these conforming limits may have slightly lower interest rates.

– Jumbo Loans:
For loans exceeding the conforming loan limit, borrowers will need to secure a jumbo bank statement loan. Jumbo loans typically have stricter underwriting guidelines, higher interest rates, and larger down payment requirements. However, for well-qualified borrowers, these loans can range into the millions of dollars. Some lenders offer bank statement loans up to $5 million, though the terms will vary significantly based on the borrower’s financial profile.

Bank statement mortgage loans provide a viable path to homeownership for self-employed individuals who might not qualify for traditional loans. While they offer flexibility in income verification, the loan limits can vary based on several factors, including credit score, down payment, and DTI ratio. Borrowers seeking larger loans, especially those above conforming limits, should expect stricter guidelines and higher interest rates. By carefully managing their financial profile and working with experienced lenders, borrowers can secure a bank statement mortgage that meets their needs.