Can You Buy a House If Your Tax Returns Show Low Income?

Your tax return shows income after business expenses: vehicles, equipment, home office, depreciation, and more. That's often far less than the money that actually flows through your business, so the number a lender uses can understate what you can afford.

Any responsible lender needs to confirm you can repay. Tax returns are the most common way to do that because they're an official record. When returns don't tell the whole story, some programs look at other evidence of steady income instead.

Tax returns show income after deductions. Bank statements show the deposits coming into your accounts over time. A profit and loss (P&L) statement summarizes what your business earns and spends.

Programs that accept bank statements or a P&L typically still review them closely, and they often ask for a larger down payment than programs based on tax returns. Bank statements don't automatically replace tax returns, and some situations will still call for them.

Each financing program decides which documents it accepts and how it weighs them. That's why one lender can say no while another says yes, or why terms can differ for the same buyer.

• Several months of business and personal bank statements
• A current profit and loss statement
• Your recent tax returns, even if they show lower income
• Proof of how long you've been in business

For eligible buyers, our seller financing program accepts tax returns, bank statements, or a P&L to document income. With tax returns, down payments start at 10%; with bank statements or a P&L, the down payment is usually about 15%. Credit scores from 560 are considered, and the home must be in Texas and your primary residence. See our self-employed buyers page and the full requirements.

All financing is subject to qualification, underwriting, property eligibility, and approval.

Check your options in about a minute. The survey asks how you'd show your income and shows what you'd need.