The calculation of income for a Bank Statement Program is based on the type of business, the percentage of ownership of the business, and the ability to document the income to qualify.  A loan officer will average the gross deposits of the business over 12 months and then apply a standardized expense factor based on a category of the business. Once an expense factor is applied to the gross deposits the net income can be used as income to qualify for a mortgage transaction.  In situations where standardized expense calculations reflect a higher expense factor than the actual expenses, there is a secondary calculation of bank statement income that will accept either an expense ratio letter or a prepared profit and loss statement from an accountant or CPA. This secondary calculation will be considered more aggressive than that of the standardized bank statement calculation and will carry higher interest rates.