Self-employed? Explore your mortgage income options.

Conventional loans: usually a two-year history

Lenders generally look for two years of self-employment earnings, documented with the tax returns and business records required by the program. They evaluate stability, business performance, and whether the qualifying income is likely to continue. Gross sales or deposits are not the same as qualifying personal income.

A shorter history can sometimes qualify. For example, Fannie Mae allows consideration of less than two years when the most recent signed personal and business returns reflect a full 12 months of income from the current business and the file supports qualifying prior earnings in a related field or similar occupation. Other requirements and lender overlays still apply. Tax-return documentation requirements can also differ from the length of business history required.

Source: Fannie Mae: self-employed borrower underwriting and documentation. Conventional requirements vary by investor and lender.

FHA loans: history and continuity matter

FHA generally permits self-employment income after at least two years of self-employment. With between one and two years, an exception may be available when the borrower previously worked in the same or a related occupation for at least two years and meets the other requirements. It is not an automatic exception for every new business.

Expect a review of tax returns and supporting business records, with current financial information as required. The originator must calculate eligible income; the amount of money flowing through a business account does not establish the FHA qualifying amount.

Source: HUD FHA Single Family Housing Policy Handbook. Confirm current program rules and lender requirements for your application.

Do not have the usual history or tax-return income?

Ask us to review the whole situation before ruling out financing. Depending on your business, documentation, credit, property, and lender, a bank-statement mortgage or another alternative-documentation program may be available.

Bank-statement programs commonly analyze 12 or 24 months of eligible personal or business deposits rather than using tax returns to establish qualifying income. Business expenses and non-income deposits affect the calculation. These programs still review income, business history, assets, credit, and debts. They are not an automatic workaround for having less than two years in business. Confirm the selected lender’s minimum history and document requirements.

Investors: qualify through the property’s rent with DSCR

For an eligible non-owner-occupied rental property, a debt service coverage ratio (DSCR) loan may qualify using property cash flow instead of the borrower’s personal employment income. Some programs do not require personal income or employment documentation for qualification.

The lender reviews qualifying rent, which may include appraiser-supported market rent for a proposed rental under its guidelines, against the defined housing payment or debt service. An unverified prediction of future rent is not enough. Credit, down payment or equity, reserves, property eligibility, and lender requirements still apply; some loans have prepayment penalties.

DSCR is an investment-property program—not a substitute for documenting income on the home you plan to occupy. Ask about the applicable rental calculation and total loan costs before making an offer.

Example lender descriptions: bank-statement documentation · DSCR rental-property financing. These are examples of program structures, not a lender recommendation or a guarantee of availability through our team.

Bring these details to the first conversation

• Business start date, industry, and ownership percentage.
• Prior work experience in the same or a related field.
• Available tax returns, current profit-and-loss information, and bank-statement history.
• The property’s intended occupancy: your home, second home, or rental investment.
• For investors, an existing lease or proposed rental plan and available funds.

Share documents through the approved secure process. Read our mortgage pre-approval guide for broader preparation.