A bank statement loan calculates qualifying income by averaging deposits over either 12 or 24 months — no tax returns reviewed, no W-2s required. The number of months you choose changes the income calculation, sometimes by a significant margin. Understanding when each option wins is the difference between qualifying for the home you want and qualifying for less.
Dynamic Funding Solutions offers both 12-month and 24-month bank statement loan programs for Pennsylvania and Florida self-employed borrowers. We run the calculation both ways on every file and recommend the program that produces higher qualifying income for your specific deposit history.
How Bank Statement Loan Income Is Calculated
Both programs use the same core method: add up all deposits over the statement period, divide by the number of months, and arrive at average monthly income. That average becomes the qualifying income the lender uses to calculate how much you can borrow.
The Deposit Averaging Method
For a 12-month program: total deposits over 12 months ÷ 12 = average monthly income.
For a 24-month program: total deposits over 24 months ÷ 24 = average monthly income.
If personal bank statements are used, the full deposit average counts as qualifying income — no expense factor deduction. If business bank statements are used, the expense factor (typically 50%) reduces the qualifying income figure. See the companion page on personal vs business bank statements for the expense factor decision.
12 Months vs 24 Months: What Changes in the Math
A borrower with $15,000/month in deposits for months 1–12 and $22,000/month for months 13–24 (most recent):
- 12-month program: $22,000 average monthly income = $264,000 qualifying income
- 24-month program: ($15,000 + $22,000) ÷ 2 = $18,500 average monthly income = $222,000 qualifying income
In this scenario, the 12-month program produces $42,000 more in qualifying income. The right choice depends entirely on your deposit pattern.
When a 12-Month Bank Statement Loan Wins
The 12-month program outperforms the 24-month program in three specific scenarios: rising income, a low year in the prior period, and new businesses without two years of history.
Rising Income: When Recent Growth Matters
Self-employed borrowers whose income has grown in the past year benefit most from a 12-month program. A business that doubled revenue in year two — with deposits of $10,000/month in year one and $20,000/month in year two — qualifies at $20,000/month on the 12-month program versus $15,000/month on the 24-month program. The 24-month average pulls the qualifying income down to a level that no longer reflects the borrower’s actual earning capacity.
Income Gap Years: Avoiding a Low Prior Year
A low-income year between months 13 and 24 will drag down the 24-month average. Common scenarios: a business owner who took time off for a health issue, a contractor who had a slow Q1–Q2 in the prior year, or a borrower who transitioned between business structures with temporary income disruption. The 12-month program excludes that gap year entirely from the income calculation.
New Businesses: Borrowers Without 2 Years of History
Some non-QM lenders offer 12-month programs to self-employed borrowers who have been in business for at least 12 months but less than 24. This makes homeownership accessible without waiting for a full two-year history. Eligibility varies by lender; DFS identifies which lenders in its non-QM network offer this option.
When a 24-Month Bank Statement Loan Wins
The 24-month program outperforms the 12-month program in three specific scenarios: seasonal businesses, recent income dips, and lender-required minimum history.
Seasonal Businesses: Smoothing Annual Variation
A landscaping contractor in Pennsylvania deposits $35,000/month from April through October and $5,000/month from November through March. On a 12-month program, the qualifying income changes dramatically depending on when the borrower applies. The 24-month program averages two full seasonal cycles, producing a stable and representative qualifying income figure — and a more consistent file for underwriting.
Recent Income Dip: When Stability Helps
If the most recent 12 months include a dip — a slow quarter, a large expense month, a contract gap — the 24-month average may produce higher qualifying income by including stronger prior-year months. A borrower with $22,000/month in year one and $15,000/month in year two qualifies at $18,500/month on the 24-month program versus $15,000/month on the 12-month program.
Lender Preference: Some Programs Only Offer 24 Months
Certain non-QM lenders — particularly for jumbo loans above $1 million or for borrowers with credit scores below 660 — require 24-month bank statement history as a minimum. DFS identifies which lenders have this requirement and routes files to the appropriate program based on the borrower’s profile.
Pennsylvania and Florida Bank Statement Loan Programs
Dynamic Funding Solutions serves self-employed mortgage Pennsylvania borrowers and Florida self-employed borrowers through its non-QM lender network. Both 12-month and 24-month programs are available in both states.
Which Program DFS Recommends
The recommendation is always based on the actual deposit data. Before any application, DFS reviews both 12-month and 24-month deposit histories — using personal statements, business statements, or both — and identifies which combination produces the highest qualifying income. There is no universal answer; the right program is the one the numbers support.
Business owners should also review the business owner home loan Pennsylvania page for the expense factor and CPA letter mechanics that affect business statement qualification. Florida borrowers can review the bank statement loan Florida page for state-specific program details. 1099 contractors in Pennsylvania should see the 1099 contractor mortgage Pennsylvania page.
Frequently Asked Questions
Is a 12-month or 24-month bank statement loan better?
It depends on income trend. If deposits grew significantly in the past year, 12 months produces higher qualifying income. If a borrower had a low year in months 13–24, 12 months avoids that drag. If income is stable or seasonal, 24 months may produce a more consistent qualifying average that some lenders prefer. DFS calculates both and recommends accordingly.
How many months of bank statements do I need for a mortgage?
Non-QM bank statement loans require either 12 or 24 months of statements — all pages of each month. Most programs offer both options. Dynamic Funding Solutions reviews both calculations and recommends the program that produces higher qualifying income for your deposit pattern.
Can I use only 12 months of bank statements for a mortgage?
Yes. Most non-QM lenders offer a 12-month bank statement option. Some lenders require 24 months, particularly for larger loan amounts or lower credit scores. DFS works with lenders who offer both programs and routes each borrower to the right option.
How is income calculated differently on 12-month vs 24-month programs?
Both programs calculate income by averaging total deposits over the statement period. On a 12-month program, only the most recent 12 months count. On a 24-month program, all 24 months are averaged. If deposits were $15,000/month in months 1–12 and $20,000/month in months 13–24, the 12-month program produces $20,000/month qualifying income vs $17,500/month on the 24-month program.
What if I had a bad year? Can I still qualify?
Yes. If the low year falls outside the 12-month window, a 12-month program excludes it entirely from the income calculation. If the low year is within the most recent 12 months, a 24-month program may be better if the prior year was stronger. DFS identifies which scenario applies and routes the file accordingly.
Talk to a Bank Statement Loan Specialist
Contact Lena Polnet, NMLS #17225, to review your deposit history and identify which program — 12 months or 24 months, personal or business statements — produces the highest qualifying income for your file.
- Phone: (215) 364-7171
- Schedule a free 15-minute strategy call: calendly.com/lena-polnet