Bank Statement Loans Texas: The Complete Self-Employed Guide

Houston’s energy sector produces independent contractors and company owners who earn $280,000–$800,000/year in business income that their accountants systematically reduce through SEP-IRA contributions, equipment depreciation, and legitimate business expenses. The tax return shows $180,000. The business account shows $650,000 in deposits. The bank statement loan uses the deposits.

Dallas’s corporate services economy — 55 Fortune 500 companies generating a surrounding ecosystem of independent consultants, marketing firms, technology vendors, and professional service companies — creates a consistent flow of LLC and S-Corp owners whose actual business income vastly exceeds what their Schedule C shows.

Austin’s technology startup community has produced thousands of company founders and operators in the $300,000–$2M+ annual deposit range. Their tax returns are works of optimization. Their banks accounts tell a different story.

No Texas state overlay. TX SML. National $4M maximum applies throughout the state.

Texas Self-Employed? No Tax Returns Required.
No state overlay · TX SML · Up to $4,000,000 · 640 minimum credit

Mbanc NMLS #38232 | TX SML Mortgage Company License | Equal Housing Opportunity Lender

Texas Program Overview: No State Overlay

Unlike Florida, Illinois, New York, New Jersey, and Connecticut — which have Mbanc state overlays restricting maximum loan amounts — Texas has no state-specific Non-QM program restrictions.

Maximum loan amount: $4,000,000. National maximum. No Texas cap.
Maximum purchase LTV: 85%. Same as national program.
Maximum refinance LTV: 80%. Same as national program.

This means Texas bank statement borrowers who need $2.5M, $3M, or larger loans — a real need in luxury markets like River Oaks, Highland Park, and The Woodlands — can access the full national program without bringing additional down payment to hit a state-specific cap.

Texas is a title company state. No real estate attorney required for closings. Standard 21–28 day close timeline. Remote online notary fully available for out-of-state borrowers purchasing Texas properties.

Texas Bank Statement Requirements

Minimum credit score: 640.

Maximum loan: $4,000,000. Minimum: $150,000.
Reserve requirements: 3 months PITIA at ≤80% LTV; 6 months at 80.01–85%.
Self-employment history: 2 years documented.
DTI maximum: 50%. Up to 55% on primary under specific conditions.
Credit events: 36+ months for all major events.
Loan terms: 30-yr fixed, 40-yr fixed, 5/6, 7/6, 10/6 ARM, interest-only.

The Texas Energy Contractor: The Biggest Bank Statement Gap in the State

No borrower profile in Texas demonstrates the conventional mortgage failure more starkly than the senior Houston petroleum engineer or energy consultant who left corporate employment to work independently.

The mechanics:
Former ExxonMobil VP of Reservoir Engineering. Left after 20 years to consult independently for exploration companies. Four clients. Annual 1099-NEC income: $580,000. Annual business bank deposits: $460,000 (after business expenses paid from business account).

Tax return analysis:
SEP-IRA contribution: $66,000.
Specialized petroleum software (Petrel, Kingdom, CMG): $24,000.
Professional liability insurance: $16,200.
Home office: $14,400.
Business travel (Houston + Midland + New Mexico client sites): $38,000.
Professional development (SPE, conferences): $9,600.
Total deductions: $168,200.

Schedule C net: $580,000 − $168,200 = $411,800 = $34,317/month.
Conventional 2-year average qualifying: approximately $31,500/month (if prior year was lower).

Bank statement qualification:
Monthly deposits: $460,000/12 = $38,333/month.
Standard 50%: $19,167/month. (Worse than conventional here — high expenses paid from business account reduce deposits significantly.)

1099 loan alternative:
$580,000 × 90% ÷ 12 = $43,500/month. This is the right program for this contractor.

The lesson: for 1099 income contractors in Texas, always run the 1099 loan alongside bank statement. The 90% qualifying ratio on gross 1099 income typically beats bank statement for contractors with documented client payments. Bank statement wins for business owners whose income comes from multiple revenue streams not documented on 1099s.

Texas Business Owner Profiles: Where Bank Statement Dominates

Construction company owners:
Texas’s sustained construction boom has created thousands of general contractors, specialty subcontractors, and building material suppliers generating $500,000–$5M+ in annual business deposits. These businesses have real expenses (materials, subcontractor payments, equipment, labor) — but also real deposits. CPA-certified expense ratios of 35–55% are common for construction businesses. Even at 45% expenses, $200,000/month in deposits produces $110,000/month qualifying income.

A Dallas-area general contractor averaging $185,000/month in business deposits with CPA certified 42% expense ratio: $185,000 × 58% = $107,300/month qualifying income. Tax return after payroll, materials, equipment depreciation, retirement: $245,000 = $20,417/month. Bank statement produces $86,883/month more qualifying income.

Restaurant and hospitality operators:
Texas’s hospitality industry is massive — from Austin’s food culture to Houston’s restaurant ecosystem to Dallas’s fine dining scene. Independent restaurant groups generating $180,000–$800,000/month in business deposits are frequent bank statement borrowers. Standard 50% expense ratio for hospitality businesses is appropriate (food cost, labor, and occupancy represent significant genuine expenses). $200,000/month × 50% = $100,000/month qualifying income.

Technology company founders:
Austin’s startup ecosystem has produced hundreds of technology company founders generating $100,000–$1M+/month in business deposits from SaaS subscriptions, technology services, and product sales. Many are S-Corp structures where the business deposits include retained earnings, owner distributions, and client payments. CPA-certified expense ratios of 20–35% are common for technology services businesses.

Real estate investors and agents:
Texas agents and brokers — particularly in the DFW luxury and commercial markets — generate substantial commission income that may deposit into business accounts alongside investment property income, commission splits, and referral fees. 24-month averaging captures the full picture of a real estate professional’s income.

Three Complete Texas Bank Statement Transactions

Transaction 1 — Dallas Construction Company Owner:
General contractor, 11-year LLC. 24-month average monthly business deposits: $185,000. CPA certified 42% expense ratio: $185,000 × 58% = $107,300/month qualifying income.
Tax return net (after payroll for 3 employees, materials, equipment): $245,000 = $20,417/month.

Target: $1,400,000 primary in Highland Park. No TX overlay. 80% LTV ($1,120,000 loan). PITIA: $8,600/month. DTI: 10.4%. Credit: 718. Close: 25 days. Tax return: not submitted.

Transaction 2 — Austin SaaS Founder (Growing Income):
Technology founder, 4-year company. 12-month deposits (currently $295,000/month) vs prior year average $210,000/month. 12-month wins.
$295,000 × 75% (CPA at 25%) = $221,250/month qualifying.
Target: $2,500,000 primary in Westlake Hills. No TX overlay ($4M max). 80% LTV ($2,000,000). PITIA: $15,400/month. DTI: 9.0%. Credit: 724. Close: 26 days.

Transaction 3 — Houston Restaurant Group Operator:
3-location restaurant group. 24-month average deposits: $245,000/month. Standard 50% (declined CPA engagement — expenses genuinely are ~50%): $122,500/month qualifying.
Tax return net: $185,000 = $15,417/month. Conventional decline at target loan amount.
Target: $1,550,000 primary in River Oaks. No overlay. 80% LTV ($1,240,000). PITIA: $9,500/month. DTI: 11.7%. Credit: 692. Close: 27 days.

Texas Bank Statement + DSCR: The Two-Track Strategy

Texas is Mbanc’s highest-volume state for BOTH bank statement primary residence lending AND DSCR investment property lending. The two programs serve the same self-employed Texas borrower — one for the home they live in, one for the properties they invest in.

The structure:
Bank statement loan → qualifies the primary residence on business deposits.
DSCR loans → each investment property qualifies on its own rental income.

The Texas DSCR investor must navigate property taxes carefully. Dallas County (2.10–2.25%) and Harris County (2.05–2.25%) are among the highest effective rates in any DSCR state. The homestead exemption trap: sellers’ current tax bills often understate what an investor will pay post-purchase. Always confirm exemption status at the county appraisal district before modeling any Texas DSCR.

Best Texas DSCR markets: San Antonio (Converse, Universal City — military BAH-anchored), South Pearland (Brazoria County, slightly lower taxes than Harris), Mesquite/Garland (Dallas County value corridor at $235,000–$350,000).

Frequently Asked Questions

Is there a maximum bank statement loan in Texas?

No Texas-specific cap. National maximum of $4,000,000 applies. Texas is one of the few states where bank statement loans above $2M are routinely closed.

Does Texas require an attorney for bank statement loan closings?

No — Texas is a title company state. No attorney requirement. Standard close timeline applies.

What Texas industries use bank statement loans most?

Construction (GCs and specialty contractors), energy (consultants and company operators), real estate (agents and investors), hospitality (restaurant groups), and technology (Austin startup founders and Dallas technology consultants).

Should a Texas energy contractor use 1099 or bank statement?

If they receive 1099-NEC from energy company clients, always run the 1099 loan comparison first. The 90% qualifying ratio on gross 1099 income typically beats bank statement for contractors with documented client payments. Bank statement wins for business owners with diversified revenue streams.

Not a commitment to lend. TX SML | Mbanc NMLS #38232 | Equal Housing Opportunity Lender

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