Question 1

What does Washington's tax structure mean for a self-employed borrower's paperwork?

Accepted Answer

There is no state return showing your income, which is exactly why deposits matter here. Washington has no income tax on the money you earn today and no corporate income tax; the state runs on excise taxes instead. That means a Washington investor has no state income tax return to hand a lender, and the federal return is the one document that write-offs distort most. Our bank statement program reads deposits into a business or personal account instead. Note one change coming: SB 6346, signed March 30, 2026 as chapter 238, Laws of 2026, creates a 9.9% tax on Washington income above a $1,000,000 standard deduction for tax years beginning January 1, 2028, reaching pass-through K-1 income, Washington-source business and rental income, and net long-term capital gains. It is being challenged in court. Talk to your Washington CPA about your own position.

Question 2

Does the business and occupation tax show up in my bank statements?

Accepted Answer

Probably, if you do anything other than own and rent real estate. RCW 82.04.390 says the B&O chapter does not apply to gross proceeds derived from the sale of real estate, and WAC 458-20-118 says amounts from the sale and rental of real estate are exempt. But a mere license to use property, without exclusive possession, is taxable service income, and so are commissions, interest and fees. The Department of Revenue publishes service rates of 1.5% under $1 million of prior-year income, 1.75% from $1 million to $4,999,999, and 2.1% at $5 million and above, with retailing at 0.471% and wholesaling at 0.484%, plus a small business credit. If your deposits mix rental income with property management or contracting revenue, expect us to ask which is which. Your CPA should be the one classifying it.

Question 3

Do you need a state license to make this loan to me in Washington?

Accepted Answer

Not for a business-purpose loan on non-owner-occupied property. RCW 31.04.025(4)(e) exempts from the Consumer Loan Act any person making a loan primarily for business, commercial, or agricultural purposes unless the loan is secured by a lien on the borrower's primary dwelling. Read that carve-back carefully, because it is narrower than most states: it is your own home, not any dwelling. The Mortgage Broker Practices Act is drawn the same way, defining a residential mortgage loan by personal, family, or household use in RCW 19.146.010(19). The practical consequence for you is that this program is available on investment property only, and we document business purpose on every file. If the collateral is the house you live in, this is not the product.

Question 4

If I am buying a rental, does the statewide rent cap change what I can underwrite?

Accepted Answer

Yes, and it applies whether or not you document income the traditional way. RCW 59.18.700 bars a rent increase in the first 12 months of a tenancy and caps later increases at 7% plus CPI or 10%, whichever is less, published annually by the Department of Commerce at 9.683% for 2026 and 10% for 2027. A non-owner-occupied rental house is covered once it is more than 12 years past its first certificate of occupancy. The release valve is vacancy decontrol: there is no cap on what you charge a new tenant after the old one leaves. Notice is 90 days statewide, longer in Seattle and Tacoma. Build a realistic rent path into your deposits picture rather than an optimistic one.

Question 5

What credit score do I need for a Washington bank statement loan?

Accepted Answer

640 is the floor on this program. Unlike our asset-based loans, this one prices off credit as well as cash flow, so the score is a real input. At the floor, expect lower leverage rather than a decline, and there is no hard credit pull to open a file. If your score will not clear 640, the asset-based side of the shop, meaning fix and flip, bridge and construction, has no minimum score at all. Subject to underwriting.

Question 6

How much do I need to put down on a Washington bank statement loan?

Accepted Answer

From 20%. On a $500,000 Washington investment purchase, 20% down is $100,000 from you and $400,000 from us (500,000 x 80% = 400,000). Where you land inside that depends on the deposits, the property, and the score. Qualify on bank statements or on the asset with no income documents at all. Add closing costs and reserves on top, and remember that Washington property tax is assessed at full value with no cap. Subject to underwriting.

Question 7

What loan sizes do you write on this program in Washington?

Accepted Answer

$100,000 to $3,000,000. That covers most single-family and small multifamily in the state. Below $100,000 the fixed cost of a closing eats the deal for both of us, and above $3,000,000 a commercial structure usually fits better. If you hold five or more properties, ask about a portfolio loan instead of writing them one at a time. Subject to underwriting.

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