By Mark Cohen, Founder & CEO, Cohen Financial Group | NMLS #37230
Direct Answer: Self-employed borrowers in Los Angeles can qualify for a mortgage without tax returns through three main Non-QM paths. Bank statement loans calculate income from 12 to 24 months of deposits. P&L only programs calculate income from a CPA-signed profit and loss statement. Asset depletion loans calculate qualifying income from liquid assets rather than earned income. Which option fits best depends on how a borrower’s income shows up on paper versus in the bank.
Why Do Self-Employed Borrowers in Los Angeles Get Declined for a Mortgage?
Traditional underwriting leans almost entirely on tax returns. That penalizes the exact borrowers who are often the strongest financial risks: business owners who legitimately write off expenses under IRS rules for the self-employed, freelancers and consultants with income that varies month to month, and 1099 earners whose reported taxable income understates their real cash flow. None of that reflects an inability to repay. It reflects how a good accountant does their job.
What No-Tax-Return Mortgage Options Are Available in Los Angeles?
These loans fall outside the federal Qualified Mortgage standard, which is exactly why lenders can use alternative documentation to evaluate ability to repay instead of relying on tax-return income.
Bank Statement Loans — Income is calculated from 12 to 24 months of personal or business bank deposits rather than tax returns. This is the most common no-tax-return path in Los Angeles and the one we cover in full detail, including credit score minimums, down payment ranges, and current qualification standards, in our Bank Statement Loan Guide.
P&L Only Programs — Instead of bank deposits, income is calculated from a CPA-signed profit and loss statement summarizing revenue, expenses, and net income over a set period. This path tends to fit borrowers whose bank deposits alone don’t tell a clean story, for example a business with irregular client payment timing, but whose books, when properly prepared, clearly support the loan. Because a P&L reflects current-year performance rather than a prior tax year, it can also better represent a business that has grown recently. Requirements and acceptable formats vary by lender, so this route typically works best paired with a broker who knows which lenders will take it alone versus alongside bank statements.
Asset Depletion Loans — Qualifying income is calculated from liquid assets (investment accounts, savings, retirement funds) rather than earned income at all. This fits high-net-worth borrowers across the Westside, Beverly Hills, and Malibu whose income is genuinely low or irregular but whose asset base easily supports the loan. See our full breakdown in How Los Angeles High-Net-Worth Borrowers Qualify Without Income.
Which Program Fits Your Situation?
| Your Situation | Best-Fit Program |
|---|---|
| Recent income growth, strong deposit history | Bank statement loan (12-month lookback) |
| Seasonal or fluctuating income, longer track record | Bank statement loan (24-month lookback) |
| Clean books but messy or irregular deposits | P&L only program |
| Low reported income, substantial liquid assets | Asset depletion loan |
| Not sure which fits | A broker working across all three can structure around whichever one your financial picture actually supports |
What Do Non-QM Lenders Look for When Qualifying Los Angeles Borrowers?
Regardless of which path fits, most Non-QM lenders are evaluating the same underlying questions: at least two years of self-employment or asset history, a credit score generally starting around 620 (with the strongest terms at 680+), cash reserves covering several months of payments, and an overall ability to repay that isn’t solely dependent on a single document type. Non-agency lending like this has grown into a larger share of the mortgage market: as of April 2026, the non-agency share of residential mortgage-backed securities reached its highest level since before the 2008 financial crisis, according to the Urban Institute’s Housing Finance Policy Center, reflecting how mainstream alternative documentation lending has become for qualified borrowers.
How Have Los Angeles Self-Employed Borrowers Used These Loans?
CLOSED WITH COHEN — LOS ANGELES
$3.4M Home Purchase
85% LTV | 30YR Fixed, 10YR Interest-Only | Closed in 17 Days
A high-leverage, self-employed borrower who didn’t qualify using tax returns secured financing by qualifying with bank statements instead. With strong underlying income, we structured the deal and closed in just 17 days.
CLOSED WITH COHEN — HOLLYWOOD HILLS
$850K Second Trust Deed Loan
70% LTV | 30YR Fixed Rate
We secured a second trust deed loan in Hollywood Hills using bank statements for qualification, allowing the borrower to access cash out without providing tax returns.
CLOSED WITH COHEN — HANCOCK PARK
$3.5M Home Purchase
85% LTV | Non-QM Financing | Closed in 25 Days
Bank statements told the story tax returns couldn’t. We secured high-leverage financing for this self-employed borrower, no tax returns required, and closed in 25 days.
Why Should Los Angeles Borrowers Work With Cohen Financial Group?
Choosing the right no-tax-return path isn’t something most borrowers should have to figure out alone, and getting it wrong can mean a declined application or a worse rate than necessary. Cohen Financial Group works across bank statement, P&L, and asset depletion programs with a broad lending network, so the structure fits the borrower rather than the other way around. Mark Cohen was ranked the #1 Non-QM Originator in the U.S. by Scotsman Guide’s 2026 Top Originators Rankings, with the direct lender relationships that come with that volume.
Frequently Asked Questions
Q: How do I know which no-tax-return mortgage program fits my situation as a Los Angeles borrower?
A: It depends on how your income and assets are documented. A quick conversation about your bank deposits, books, and liquid assets is usually enough to identify the strongest fit.
Q: Can I combine documentation types, like bank statements plus assets?
A: Some lenders allow blended documentation strategies. Availability depends on the specific program and lender.
Q: Do no-tax-return loans close fast enough for competitive Los Angeles offers?
A: Timelines vary by lender and documentation complexity rather than by program type alone. Bank statement loans tend to be the most standardized, and as shown in our recent 17-day and 25-day closings, can move fast enough to compete in a fast-moving Los Angeles market.
Q: What if I don’t qualify for the program I originally wanted?
A: Because Cohen Financial Group works across multiple Non-QM programs, we can often restructure toward a different documentation path without starting the loan process over.
Q: Do no-tax-return mortgages work for high-value Los Angeles neighborhoods like Beverly Hills or Hancock Park?
A: Yes. Non-QM programs are commonly used for high-value purchases across Beverly Hills, Bel-Air, Hancock Park, and the Westside, where loan amounts often exceed conventional limits and buyers need documentation flexibility to move quickly.
Secure the Financing You Need
Every self-employed borrower’s financial picture is different, and the right documentation strategy can open financing options a conventional lender would never offer. Connect with Cohen Financial Group to find out which no-tax-return program fits your situation.
About Mark Cohen: Mark Cohen founded Cohen Financial Group in 1986. He has personally originated more than 31,200 loans totaling over $18 billion, the only broker in the country to average $1 billion in annual volume for 11 consecutive years, and holds Scotsman Guide’s 2026 #1 Mortgage Broker and #1 Non-QM Originator rankings. NMLS #37230. Cohen Financial Group, NMLS #1593077, DRE #01016103, 9665 Wilshire Boulevard, Suite 260, Beverly Hills, CA.