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Mbanc NMLS #38232 | Equal Housing Opportunity Lender

First-Time Homebuyers and Bank Statement Loans — What You Need to Know

Being a first-time homebuyer does not disqualify you from a bank statement loan. The standard requirements — minimum 640 credit score, 15% down payment, 2 years self-employment, maximum 50% DTI — apply the same to first-time buyers as to repeat buyers.

Two restrictions are specific to first-time homebuyers:

1. The 55% DTI exception is not available.
Mbanc offers a DTI exception allowing up to 55% DTI on primary residence bank statement loans, but only for borrowers who are NOT first-time homebuyers. If you’ve never owned a home, your maximum DTI is 50%.

2. Certain program tiers restrict first-time buyers.
Investment property bank statement programs through DSCR structures often require that the buyer already owns a primary residence. First-time homebuyers are eligible for DSCR loans only with specific conditions — minimum 700 credit score, DSCR above 1.00, and property must be a single unit.

Everything That Is Available to First-Time Buyers

If the two restrictions above don’t affect your scenario, all other bank statement loan features are available:

– Minimum 640 credit score
– Maximum 85% LTV on primary residence purchase (15% down)
– Loan amounts from $150,000 to $4,000,000
– 12 or 24 months personal or business bank statements
– Maximum 50% DTI
– 40-year terms available
– Interest-only available (660+ credit)
– All eligible property types (SFR, 2–4 unit, condo)
– Cash-out refinance available after purchase

First-Time Homebuyer Program Nuances

Gift funds: Primary residence first-time buyers can receive 100% gift funds for down payment when LTV is at or below 80% and the buyer meets reserve and residual income requirements. At LTV above 80%, minimum 5% must come from the buyer’s own funds.

Reserve requirements: Same as all other borrowers — 3 months PITIA at LTV ≤80%, 6 months at LTV 80.01–85%.

Tradeline requirements: Same standard tradeline requirements apply.

Why Self-Employed First-Time Buyers Need Bank Statement Loans

The first-time homebuyer self-employed borrower faces a particular challenge. They haven’t had years of homeownership to build equity and credit profile around. Their income is self-employment-based and their tax returns understate it. They may have strong cash flow and clean credit but no mortgage history to point to.

Bank statement loans serve this borrower well. The program evaluates creditworthiness holistically — bank deposits, credit score, reserves, and DTI — without requiring tax returns or W-2s.

Frequently Asked Questions

Can a first-time homebuyer use a bank statement loan?

Yes. First-time homebuyers qualify for bank statement loans with standard requirements: minimum 640 credit score, 15% down, 2 years self-employment, maximum 50% DTI.

What is the maximum DTI for a first-time homebuyer bank statement loan?

50%. The 55% DTI exception that may be available to repeat buyers is not available to first-time homebuyers.

Can I get a bank statement loan with no prior mortgage history?

Yes. No prior mortgage history is required for primary residence bank statement loans.

Can a first-time homebuyer purchase an investment property with a bank statement loan?

First-time homebuyers may access investment property bank statement loans with restrictions — minimum 700 credit score, DSCR must be above 1.00 if DSCR qualified, and they must own a primary residence first. Pure investment property acquisition as a first-time buyer has limited program access.

Does gift money count for a bank statement loan down payment as a first-time buyer?

Yes. 100% gift funds are allowed for primary residence bank statement loans at LTV of 80% or below, with the buyer meeting reserve and residual income requirements.

About the Author

Mayer Dallal is the Managing Director of Mbanc (Mortgage Bank of California, NMLS #38232), a consumer-direct Non-QM lender specializing in bank statement loans, DSCR loans, and asset utilization programs for self-employed borrowers and real estate investors. Mbanc is licensed in 22 states for primary residence lending plus an additional 24 states and Washington DC for non-owner-occupied investment property financing under the business-purpose exemption.

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Mbanc NMLS #38232 | Equal Housing Opportunity Lender

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