Mortgage Navigator • Non-QM Underwriting
P&L-Based Underwriting
A P&L can be useful only when the investor accepts the preparation method and finds the business results credible.
What may be reviewed
Business existence, operating history, preparer qualifications, revenue and expense reasonableness, year-to-date period, supporting records and consistency with the borrower’s occupation may be evaluated.
P&L-only does not mean evidence-free
Even when tax returns are not the qualifying method, the investor may require other documentation to establish the business and support the reported income.
Investor matrix, not a universal Non-QM rule. Bank-statement calculations, expense factors, DSCR formulas, asset haircuts, credit-event seasoning, LTV, reserves and documentation can vary materially by investor and lender. MortgageDadOf3 separates the concept from the actual program matrix so a lender overlay is not mistaken for an industry-wide rule.
Consumer-purpose loans still require the applicable consumer-protection analysis. For covered transactions, Regulation Z’s Ability-to-Repay framework generally requires a reasonable, good-faith determination of repayment ability. Alternative documentation is not the same thing as “no documentation.”
Consumer-protection references
CFPB / Regulation Z §1026.43 Ability-to-Repay · CFPB Qualified Mortgage explanation · IRS IVES transcript information