A straight answer
Can I get a HELOC if my business income dropped last year but is back up now?
The direct answer
Yes, I offer bank statement HELOCs that qualify self-employed owners on 12 months of personal or business bank statements instead of tax returns. Last year's return shows the drop, and the statements show your deposits over the past 12 months.
I'm Zach von der Linden (NMLS 1652805), a mortgage broker with West Capital Lending, based in San Clemente. I put the financing together, and I tell you plainly which program fits. I work with homeowners in California, Utah, Oregon and Arizona.
Zach von der Linden, mortgage broker and Branch Manager, West Capital Lending · NMLS 1652805
Wholesale pricing · California, Utah, Oregon and Arizona
5.0 across 66 reviews on Experience.com (read on 2026-09-24) · Text reaches Zach directly · Last updated 2026-10-19
A slow year behind you? Text me what caused the drop, when it ended, what deposits run now, what you owe on the home and what it is worth.
This situation is worked out in a short conversation. No credit pull happens from a conversation. The options check is a soft credit pull with no impact on your credit score for the first look. Texts go to Zach's cell.
Why does a drop on my return matter to a lender?
On a loan sold to Fannie Mae, the lender must "measure year-to-year trends for gross income, expenses, and taxable income for the business" (Fannie Mae Selling Guide B3-3.5-01).
Fannie Mae also says the lender "should not include any income that does not appear to be stable or likely to continue" (B3-3.6-01).
For an owner of a quarter or more of an S corporation, business income counts only when "the sales and earnings trends are positive" (B3-3.7-02).
Those are Fannie Mae's rules for the loans it buys.
A HELOC qualified on tax returns still reads the same return, and the drop is on it.
How does a bank statement HELOC read a recovery?
It reads your deposits over the past 12 months.
I use your personal or your business account, whichever shows the larger average monthly deposits over those 12 months.
If the recovery started within the last 12 months, the slow months are in the average too.
Business-account deposits get an expense factor.
An unfiled or extended tax year does not matter for the bank statement HELOC I offer, because tax returns are not part of how it qualifies.
I also offer a HELOC qualified on a profit-and-loss statement.
It counts your profit, not losses, based on what runs through your bank accounts each month.
The lender still verifies you can repay.
Your first mortgage stays as it is, and the line sits behind it.
Once the line funds, you use the money however you choose.
What should I tell you about the drop?
What caused it: an illness, a lost client, time away, or a change in how you run the business.
When it ended, and what your deposits have run each month since.
Whether the cause can come back.
The plain story up front is what lets me tell you which route reads your file well.
What should I send first?
- Which account your business deposits land in, personal or business.
- Your last two tax returns, if you have them handy.
- A rough value for the home and your first mortgage statement.
- How much you want to access, and what it is for.
The full method is on the self-employed HELOC page.
Questions people ask next
Should I wait for my next tax return to show the recovery?
Not for a bank statement HELOC, because the statements are the income document. For a mortgage qualified on tax returns, the next return is the document that shows the recovery.
Does a one-time expense that caused the drop get added back?
On a loan sold to Fannie Mae, the guide says a nonrecurring loss "such as an extraordinary one-time expense" should not be included in the cash flow analysis. Whether your expense is read that way is the lender's call on the file. The write-offs HELOC page covers deductions.
Will my first mortgage change?
No. The line sits behind your first mortgage, which keeps its rate, its payment and its payoff date.
Does asking about this affect my credit?
A conversation does not pull credit. A full application does.
What clients say
Zach was so easy to work with. He made a stressful situation into a very positive experience for us and did push us one way or another. He listened to what we hoped we could accomplish and made it happen.
Word for word from Experience.com. Read all reviews.
Sources and checked dates
Sources: Confirmed by Zach, October 19, 2026 (9:29 PM PT, via the Chief of Staff) (checked 2026-10-19) · Confirmed by Zach, October 2026 (checked 2026-10-19) · Confirmed by Zach, September 27 and October 17, 2026 (restated for these pages) (checked 2026-10-19) · Confirmed by Zach, September 2026 (checked 2026-09-27) · Confirmed by Zach, October 17, 2026 (checked 2026-10-17) · Fannie Mae Selling Guide, B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower (12/13/2023) (checked 2026-10-19) · Fannie Mae Selling Guide, B3-3.6-01, General Information on Analyzing Individual Tax Returns (06/05/2019) (checked 2026-10-19) · Fannie Mae Selling Guide, B3-3.7-02, Analyzing Returns for an S Corporation (02/07/2024) (checked 2026-10-19) · 12 CFR 1026.43, Minimum standards for transactions secured by a dwelling (eCFR) (checked 2026-09-27) · West Capital Lending HELOC registration page (referral id omitted here) (checked 2026-09-09).
Show each claim on this page, what it depends on, and the date it was checked (11)
| What we say, and what it depends on | Source | Checked |
|---|---|---|
| Zach offers financing for these self-employed situations: a HELOC to pay off an IRS tax lien; mortgage income for S corporation owners (W-2 wages, K-1 income and distributions); a HELOC to pay off business loans and business credit cards; a divorce buyout for a self-employed homeowner; a DSCR cash-out refinance of a rental qualified on its rent; business funds for a down payment; a HELOC after a drop in self-employed income; combining a spouse's W-2 income with bank statement income; a mortgage when the business pays a debt in the owner's name; seasonal business income; bank statement loans when real business expenses are lower than the expense factor; and a mortgage when a self-employed owner moves a business into California, Utah, Oregon or Arizona. He arranges each as a broker. | Confirmed by Zach, October 19, 2026 (9:29 PM PT, via the Chief of Staff) | 2026-10-19 |
| Zach's answers for the self-employed HELOC answers. The bank statement HELOC he offers has no set minimum time in business, so a business under two years old is fine. An unfiled or extended tax year does not matter for the bank statement HELOC, because tax returns are not part of how it qualifies; no extra documents are needed for it. He also offers a HELOC qualified on a profit-and-loss statement; it counts profit only, not losses, based on what runs through the borrower's bank accounts each month. He takes 1099 and gig earners with no business entity and no business account: any account the borrower receives income into can be used, as long as it gets frequent deposits, and those deposits count toward qualifying income. | Confirmed by Zach, October 2026 | 2026-10-19 |
| Once a HELOC Zach offers funds, the borrower can use the money however they want, with no use restrictions. | Confirmed by Zach, October 2026 | 2026-10-19 |
| Zach offers bank statement HELOCs that qualify self-employed owners on 12 months of personal or business bank statements instead of tax returns, using whichever account shows the larger average monthly deposits; business-account deposits get an expense factor. He arranges the line as a broker and works with homeowners in California, Utah, Oregon and Arizona. | Confirmed by Zach, September 27 and October 17, 2026 (restated for these pages) | 2026-10-19 |
| Zach arranges a home equity line for self-employed owners that can be qualified on bank statements, which reads deposits instead of the net income on filed returns. | Confirmed by Zach, September 2026 | 2026-09-27 |
| Zach offers loans qualified on 12 months of bank statements instead of tax returns, at any loan size. He qualifies the borrower on either the personal or the business bank account, whichever shows the larger average monthly deposits over the past 12 months, and business-account deposits get an expense factor. | Confirmed by Zach, October 17, 2026 | 2026-10-17 |
| Fannie Mae Selling Guide B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower (12/13/2023): an individual who owns a quarter or more of a business "is considered to be self-employed." "The following factors must be analyzed before approving a loan for a self-employed borrower: the stability of the borrower's income, the location and nature of the borrower's business, the demand for the product or service offered by the business, the financial strength of the business, and the ability of the business to continue generating and distributing sufficient income to enable the borrower to make the payments on the requested loan." The analysis must "measure year-to-year trends for gross income, expenses, and taxable income for the business". The lender may verify income with signed federal returns "(both individual returns and in some cases, business returns) that were filed with the IRS for the past two years". It may waive business returns when the borrower uses personal funds for the down payment, closing costs and reserves, "has been self-employed in the same business for at least five years", and the individual returns "show an increase in self-employment income over the past two years". "When a borrower is using self-employment income to qualify for the loan and also intends to use assets from their business as funds for the down payment, closing costs, and/or financial reserves, the lender must perform a business cash flow analysis to confirm that the withdrawal of funds for this transaction will not have a negative impact on the business." "To assess the impact, the lender may require a level of documentation greater than what is required to evaluate the borrower's business income (for example, several months of recent business asset statements in order to see cash flow needs and trends over time, or a current balance sheet)." "When co-borrower income that is derived from self-employment is not being used for qualifying purposes, the lender is not required to document or evaluate the co-borrower's self-employment income (or loss)." | Fannie Mae Selling Guide, B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower (12/13/2023) | 2026-10-19 |
| Fannie Mae Selling Guide B3-3.6-01, General Information on Analyzing Individual Tax Returns (06/05/2019): "Any nonrecurring loss (such as an extraordinary one-time expense) should not be included in the cash flow analysis; therefore, in developing the borrower's qualifying income, the lender should adjust the borrower's cash flow by the amount of any nonrecurring loss." "In analyzing a self-employed borrower's personal income, the lender should focus on earnings trends and the actual sources of the income, not just on the total amount of the income." "The lender should not include any income that does not appear to be stable or likely to continue." | Fannie Mae Selling Guide, B3-3.6-01, General Information on Analyzing Individual Tax Returns (06/05/2019) | 2026-10-19 |
| Fannie Mae Selling Guide B3-3.7-02, Analyzing Returns for an S Corporation (02/07/2024): "A borrower with an ownership interest in an S corporation or LLC may receive income in the form of wages or dividends in addition to their proportionate share of business income (or loss) reported on Schedule K-1." "The borrower's proportionate share of income or loss is based on the borrower's (shareholder) percentage of stock ownership in the business for the tax year as shown on IRS Form 1120S, Schedule K-1." "Business income may only be used to qualify the borrower if the lender obtains documentation verifying that the income was actually distributed to the borrower consistent with the level of business income reflected on Schedule K-1, or the business has adequate liquidity to support the withdrawal of earnings." For an owner of a quarter or more of the business, the lender must perform a business cash flow analysis "to evaluate the overall financial position of the business and confirm the business income is stable and consistent, and the sales and earnings trends are positive. If the business does not meet these standards, business income cannot be used to qualify the borrower." "Items that can be added back to the business cash flow include depreciation, depletion, amortization, casualty losses, and other losses that are not consistent and recurring." | Fannie Mae Selling Guide, B3-3.7-02, Analyzing Returns for an S Corporation (02/07/2024) | 2026-10-19 |
| The federal ability-to-repay rule, 12 CFR 1026.43, applies to dwelling-secured consumer credit "other than: (1) A home equity line of credit subject to § 1026.40." | 12 CFR 1026.43, Minimum standards for transactions secured by a dwelling (eCFR) | 2026-09-27 |
| On the West Capital Lending HELOC registration page, checking qualifying rates and terms uses a soft credit pull that does not affect the credit score; continuing and submitting an application requests a full credit report, which is a hard pull that may affect credit. | West Capital Lending HELOC registration page (referral id omitted here) | 2026-09-09 |
Written for and accountable to: Zach von der Linden, Mortgage broker and Branch Manager, West Capital Lending.
Last updated 2026-10-19.
Verify him: NMLS Consumer Access, ID 1652805 · 66 reviews on Experience.com.
Sources for product claims are listed on this page, with the date each was checked.
Income dropped and came back?
No credit pull happens from a conversation. The options check is a soft credit pull with no impact on your credit score for the first look. Text Zach first so he can review your situation. The online check covers one HELOC program, not every option he may be able to arrange. Texts go to Zach's cell.