source:
  type: guide
  id: fnma-sel-b3-3.7-04
  authority: Fannie Mae Selling Guide B3-3.7-04 — Analyzing Profit and Loss Statements
  description: Fannie Mae Selling Guide B3-3.7-04 — Analyzing Profit and Loss Statements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-3.7-04-full
  canonical_id: fnma-sel-b3-3.7-04-full
  section: Fannie Mae Selling Guide B3-3.7-04 — Analyzing Profit and Loss Statements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-3.7-04 — Analyzing Profit and Loss Statements
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: B3-3.7-04, Analyzing Proﬁt and Loss Statements (04/01/2009) Introduction
      This topic contains information on analyzing proﬁt and loss statements. Analyzing
      Proﬁt and Loss Statements Analyzing Proﬁt and Loss Statements The lender may
      use a proﬁt and loss statement—audited or unaudited—for a self-employed borrower’s
      business to support its determination of the stability or continuance of the
      borrower’s income. A typical proﬁt and loss statement has a format similar to
      IRS Form 1040, Schedule C. A year-to-date proﬁt and loss statement is not required
      for most businesses, but if the borrower’s loan application is dated more than
      120 days after the end of the business’s tax year, the lender may choose to
      require this document if it believes that it is needed to support its determination
      of the stability or continuance of the borrower’s income. Published May 6, 2026
      388 If the lender did not count the borrower’s year-to-date salary or draws
      in determining the borrower’s qualifying income, it may add them to the net
      proﬁt shown on the proﬁt and loss statement as well as adding any of the allowable
      adjustments it used in analyzing the tax returns for the business, such as nonrecurring
      income and expenses, depreciation, and depletion. However, only the borrower’s
      proportionate share of these items may be considered in determining the amount
      of income from the business that the borrower can use for qualifying purposes.
      Recent Related Announcements There are no recently issued Announcements related
      to this topic. Section B3-3.8, Rental Income
  judgment: false
