Rhode Island Self-Employed Mortgage 2026

Rhode Island Trades and Newport Seasonal Owners: Qualify on Real Deposits

Rhode Island has new taxes coming for second homes and top earners, and its busiest businesses make most of their money in summer. We show how a bank statement loan reads a full year, not your slowest quarter.

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In Rhode Island, a Newport boat yard owner can earn a year of income in six months, and a tax return makes that look like half a living.

A Rhode Island self-employed mortgage is a home loan that qualifies business owners on bank statements, 1099s, or a CPA P&L instead of tax returns. It serves electricians, builders, marine trades, and small shops in Providence, Warwick, Cranston, Newport, and Westerly. A Rhode Island self-employed mortgage averages 12 or 24 months of deposits, so a hard winter does not erase a strong summer. The JD.Mortgage Team at PRMG writes these loans under the PRMG Non-QM Income Qualifying Product Profile. If a bank told you to come back with two better tax years, that is usually where our work starts. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.

Last updated: September 24, 2026

Rhode Island Self-Employed Mortgage: The Short Answer

Yes. A Rhode Island business owner can buy or refinance without tax returns. We qualify you on 12 or 24 months of bank statements, your gross 1099 income, or a CPA-prepared profit and loss statement. You need at least 2 years of self-employment and a credit score of 620 or higher.

As of Q3 2026 (September 2026): Self-employed borrowers qualify with a 620 credit score on Non-Prime terms (75% LTV, 43% DTI) or 660 on Expanded Prime terms (80% LTV, 50% DTI) (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026). Business bank statements count deposits after a fixed 50% expense factor, and 1099 income counts at 100% of gross (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026). The top loan amount is $3,500,000 (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026). The 2026 conforming loan limit is $832,750 in every Rhode Island county (FHFA 2026 conforming loan limits).

Who Uses a Self-Employed Mortgage in Rhode Island

Licensed trades in a small, dense state

Rhode Island is small enough that one electrician or plumber can work in Pawtucket in the morning and Westerly by afternoon. Many run as one-person LLCs with a truck, tools, and a business account. The truck and tools get written off. The return looks lean. We total 12 or 24 months of business deposits and apply a fixed 50% expense factor. You need at least 25% ownership. See bank statement loans.

Newport and South County seasonal owners

Boat yards, charter captains, caterers, and summer rental managers make most of their money from May to October. When income is seasonal, the PRMG profile requires 24 months of statements. That lets two summers carry two winters. A bank that reads one tax year cannot see that. If you rent a room or unit in season, keep those deposits in their own account so we can sort them from business income. Your business must have existed for at least 2 years.

Per diem health care and education contractors

Around Providence, nurses, therapists, and tutors often work for several agencies on 1099s. We count 100% of gross 1099 income plus year-to-date deposits, averaged, and match it to an IRS wage and income transcript. Agency switches do not hurt you if the work stays the same. See 1099 loans.

Small landlords building a portfolio

Triple-deckers and two-families are common in Providence and Pawtucket. If you want to add one, a DSCR loan qualifies on the rent instead of your personal income. Rhode Island is one of the states where the PRMG profile does not allow a prepayment penalty on investment loans. That means you can sell or refinance early without that fee. Two- to four-unit homes cap at 80% LTV. On the bank statement programs, first-time buyers cannot buy an investment home.

Four Ways We Measure Self-Employed Income

Your tax return reports profit after every write-off. That is the right number for the IRS and the wrong number for a mortgage. Here is what we use instead in Rhode Island. Full details live on our bank statement loans, 1099 loans, and P&L loans pages.

Path	Look-back	What we count
Personal bank statements	12 or 24 months	100% of deposits, averaged
Business bank statements	12 or 24 months	Deposits after a 50% expense factor, or a CPA expense statement
1099 income	12 or 24 months	100% of gross 1099s plus year-to-date, averaged
CPA, EA, or CTEC P&L	12 months	Net income; deposits must land within 35% of P&L revenue

Rentals can skip personal income entirely with DSCR loans, and owners with large savings can use asset utilization.

Not sure which path reads your Rhode Island income best? We run every path you qualify for and show you the strongest number.

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Rhode Island’s Three Brackets, a New Top-Earner Surtax, and a Second-Home Tax

Rhode Island taxes income in three brackets. For tax year 2026 the rates are 3.75% up to $82,050, 4.75% up to $186,450, and 5.99% above that. The brackets move with inflation every year. See the Division of Taxation 2026 inflation advisory.

Two new taxes change the planning. First, a surtax on income over $1 million starts in tax year 2027. It is 1% in 2027, 2% in 2028, and 3% from 2029 on, per the 2026 summary of legislative changes. Owners near that line will plan harder, and their returns will shrink.

Second, the non-owner-occupied property tax took effect July 1, 2026. It charges $2.50 per $500 of assessed value over $1,000,000 on homes the owner does not live in for 183 days or more a year. Long-term rentals and taxed short-term rentals rented 183 days or more can be exempt. The Division of Taxation page has the details. This hits Newport and the South County shore hardest.

What this means for a mortgage file: your personal return shows profit after every write-off. For a small trade owner, that is often a thin line. For a second-home buyer, the new tax is part of the housing payment, and it counts in your DTI. We qualify the income on deposits and put every real tax on the payment side, so the approval holds up.

What changes	Effect on your mortgage file
2027 surtax planning	Lower taxable income on the return
Non-owner-occupied tax	Higher monthly payment on some second homes
Bank statement income	Not affected by either one

A Newport Example: A Marine Trades Owner on 24 Months of Business Statements

What the tax return shows (example)

Net profit after boat, tools, and depreciation: $78,000
Monthly income used: $6,500
Housing payment (example): $4,900
Truck and card payments (example): $700
DTI = $5,600 ÷ $6,500 = 86.2% → declined

What we count on 24 months of statements (example)

24 months of business deposits: $744,000
Average monthly deposits: $31,000
$31,000 × 50% expense factor = $15,500
Same $5,600 in monthly payments
DTI = $5,600 ÷ $15,500 = 36.1% → fits at 620 (43% cap) or 660+ (50% cap)

This owner fixes and stores boats on Aquidneck Island. July deposits are five times February. A bank sees one year of net profit after heavy depreciation and stops there. We average 24 months because the income is seasonal, then take 50% off for expenses. At 36.1%, the file clears even the 43% DTI limit that applies at a 620 score.

Checklist: Rhode Island Self-Employed Loan Basics

Checklist item	Standard
Proof of business	2 years self-employed, business in place 2 years
Minimum score	620 (75% LTV) or 660 (80% LTV)
Top loan-to-value	89.99% at 740 on a primary home
Maximum loan	$3,500,000 at 70% LTV and a 700 score
Reserves	3 months (Non-Prime) to 6 months (Expanded Prime)
Occupancy	Primary, second home, or investment

Figures: PRMG Non-QM Income Qualifying Product Profile, 09/17/2026.

Buying in Rhode Island: One Loan Limit, Two Conveyance Tiers, and Waterfront Second Homes

Every Rhode Island county sits at the $832,750 2026 FHFA one-unit baseline, per the FHFA county file. Newport has no higher limit. That pushes many waterfront buyers into jumbo territory at a bank. Our self-employed loans run from $100,000 to $3,500,000 on the same income rules, with $3.5 million needing 70% LTV and a 700 score.

Rhode Island charges a realty conveyance tax. Starting January 1, 2026, it is $3.75 per $500 on the full price. On residential property, a second $3.75 per $500 applies to the part of the price over $824,000. See the Division of Taxation 2026 advisory. On a high-end Newport purchase, that second tier adds real money at closing.

If the home will be a second home, it must be one unit to fit the program. Before you sign, check whether the non-owner-occupied tax applies. If the assessed value is over $1 million and you will not live there 183 days a year, we add that tax to your monthly payment when we figure DTI.

Many Rhode Island closings are handled by an attorney. Line yours up early so title and your bank statement review finish on the same timeline. We send the attorney our figures as soon as the file is approved.

Rhode Island Self-Employed Mortgage Myths, Corrected

❌ Myth: “I only really work six months a year in Newport, so no lender will count my income.”

✅ Fact: Seasonal income is normal to us. The PRMG Non-QM profile asks for 24 months of bank statements when income is seasonal, then averages every month. Your busy season and your slow season both count.

❌ Myth: “Bank statement loans are only for people with bad credit.”

✅ Fact: They are for people whose tax return undercounts them. Borrowers from a 620 score up use them, and a 740 score reaches 89.99% loan-to-value on a primary home.

❌ Myth: “Writing off expenses ruined my chances.”

✅ Fact: Write-offs only shrink the income on a full-doc loan. On these programs we read deposits, 1099s, or a P&L, so the write-offs stay where they belong.

Turned down in Rhode Island because of your tax return? Send us your statements. We tell you what they support before you make an offer.

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Rhode Island Self-Employed Mortgage Frequently Asked Questions

Can I get a mortgage if I’m self-employed in Rhode Island?

Yes. We qualify Rhode Island owners on 12 or 24 months of bank statements, 1099 income, or a CPA-prepared P&L instead of tax returns. Most borrowers need 2 years self-employed. A 620 score works at 75% LTV and 43% DTI. At 660 and up, we can go to 80% LTV and 50% DTI. Loans run from $100,000 to $3,500,000.

Does the Rhode Island second-home tax affect my mortgage?

It can. Starting July 1, 2026, Rhode Island charges $2.50 per $500 of assessed value over $1,000,000 on homes the owner does not occupy 183 days or more. If it applies to the home you are buying, we add it to your monthly housing payment when we figure your DTI. Some long-term and taxed short-term rentals are exempt.

How much is the real estate conveyance tax in Rhode Island in 2026?

In 2026 the Rhode Island conveyance tax is $3.75 per $500 of the price. For residential property, another $3.75 per $500 applies to the part of the price over $824,000. On most homes under that line, only the first tier applies. We show the full amount in your cash to close before you sign.

Can I use a bank statement loan for a Rhode Island rental property?

Yes. Investment homes are allowed on bank statement loans, and a DSCR loan can qualify you on the rent instead. Rhode Island is one of the states where the PRMG profile does not allow prepayment penalties on investment loans. Two- to four-unit homes, common in Providence, are capped at 80% LTV.

Can I get a mortgage in Rhode Island without tax returns?

Yes. In Rhode Island we qualify self-employed borrowers on 12 or 24 months of bank statements, gross 1099 income, or a 12-month CPA profit and loss statement. Tax returns are not used. You need 2 years of self-employment and at least a 620 credit score.

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

620 is the minimum on Non-Prime terms, capped at 75% loan-to-value and 43% debt-to-income. At 660 you move to Expanded Prime with up to 80% loan-to-value and 50% debt-to-income. A 740 score reaches 89.99% on a primary home.

How do you calculate income from business bank statements?

We average your business deposits over 12 or 24 months and apply a fixed 50% expense factor. If your CPA or tax preparer writes an expense statement showing lower costs, we can use that instead. You must own at least 25% of the business.

How much can I borrow on a self-employed mortgage?

Loans run from $100,000 to $3,500,000. The top amount needs 70% loan-to-value and a 700 score. Your qualifying income, debts, and reserves decide where you land inside that range.

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About the Author

J.D. Peck is an Area Manager and Mortgage Loan Originator (NMLS #314883) with the JD.Mortgage Team at Paramount Residential Mortgage Group, Inc. (NMLS #75243), based in Colorado Springs. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.

Last updated: September 24, 2026. Self-employed program facts sourced from the PRMG Non-QM Income Qualifying Product Profile, 09/17/2026. Loan limits from FHFA 2026 conforming loan limit values. Rhode Island tax and property facts from official Rhode Island state sources linked above.

Find Out What Your Rhode Island Deposits Qualify You For

Send your statements, 1099s, or P&L. We run every path that fits and show you the loan amount, down payment, and program before you write an offer.