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For Self-Employed Borrowers:

What You Need to Know

What do mortgage lenders require to approve a loan for a self-employed person?

  • Income stability (for two years or more)

  • The location and nature of your self-employment

  • The financial strength of your business

  • The ability of your business to generate sufficient future income

Is it difficult to get a mortgage if I'm self-employed?

The basic criteria to get approved are the same for self-employed people as those who are salaried applicants. You need to have a good credit history, sufficient available assets and a history of stable employment. The documentation and calculation of income is determined by the loan program as well as the investor.


What self-employment documentation will I need to show lenders?

  • CPA letter verifying that you’ve been in business for at least two years

  • Proof of business insurance (if applicable)

  • State or local business licenses (if applicable)

What income documentation will I need to show lenders?

  • Two years of federal income tax returns (personal and business)

  • Up to two years of business bank statements

  • Profit-and-loss statement that shows revenues, expenses and net income

  • Itemized list of unpaid accounts receivable

What documents are used to verify self-employed income?

You’ll need to provide different types of documents, based on the tax form you file. We’ll need the last 2 years of your personal tax returns along with:

  • Schedule C (Sole Proprietorship)

  • K-1 / Form 1065 (Partnership)

  • K-1 / Form 1120S (S-Corp)

  • Form 1120 (C-Corp)


What if I have a low net income on my tax forms due to my legal tax deductions and write-offs?

You may be required to show additional income documents when applying for a loan, such as bank statements.

What if I have been in business for less than two years?

To qualify for a mortgage, you generally need to be self-employed for at least 2 years, but in rare cases, 12 to 24 months may also be considered. In those cases, your most recent federal income tax returns must reflect the receipt of the same (or more) income in a similar field as your new business.

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