You have great mortgage options. Here's how it works.
Getting a mortgage when you're self-employed isn't “harder,” it’s just different. The process involves more documentation, and lenders consider your income differently than they do for a borrower that earns a salary.
But the same loan programs are available to you. We help self-employed borrowers navigate this every day.
Whenever you're ready to see where you stand, we're ready to walk through it with you.
Lenders use specific definitions of self-employed, and it’s different from what you may think.
For mortgage qualification purposes, you're considered self-employed for mortgage purposes if you:
That applies whether your business is structured as a sole proprietorship, LLC, S-Corp, or Partnership. The two-year rule: Most lenders want to see at least two years of self-employment history in the same field. Less than two years may still work, particularly if you transitioned from a similar W-2 role.
Here's the tension most self-employed borrowers run into: the more you write off, the less you owe in taxes. That's good financial management. But it also means your taxable income. The number lenders use is lower than what you actually earn. And that can affect what you qualify for.
It's not a reason to avoid deductions. It's a reason to plan.
If you're planning to buy in the next one to two years, let your accountant know. Write-off strategy and mortgage qualification sometimes pull in opposite directions, and a heads-up conversation leaves room to make intentional choices.
Some non-cash deductions, like depreciation, can be added back to your qualifying income by the lender. They don't change what you filed, but they can improve the income picture a lender sees.
If your tax returns significantly understate your actual income, bank statement loans and profit and loss loan programs offer a different path. More on those in the loan options section below.
Gig economy income from platforms like Uber, DoorDash, Upwork, Etsy, or any freelance work can be used to qualify for a mortgage. But it follows the same rules as any other self-employed income.
Most lenders want two years of consistent side income documented on your tax returns before they'll count it. A gig you started recently typically won't be usable yet for qualifying purposes.
Side income that supplements a W-2 job can increase your qualifying amount. If gig work is your primary income, lenders treat you as fully self-employed, with all the documentation that comes with it.
The rules around gig income are specific enough that a conversation is worth more than any checklist. Your situation is individual, and so is the answer.
Being self-employed doesn't close the door on any loan program. Conventional, FHA, VA, and USDA loans are all available. The documentation requirements are higher, but your eligibility for these programs is the same as any other borrower. There are also alternative loan programs specifically designed for borrowers whose tax returns don't tell the full story.
5%+ down | 620+ credit
Standard agency loan. Same eligibility as any borrower, additional income documentation required.
3.5% down | 580+ credit | Government-backed
More flexibility on credit score and down payment. Same self-employed documentation applies.
0% down | No PMI | Eligible vets and servicemembers
VA eligibility is earned, not affected by employment type. Self-employment doesn't change your benefit.
0% down | Income and location limits apply
Available to self-employed borrowers in eligible areas. Household income limits apply.
Alternative documentation | Non-QM
12 to 24 months of deposits used instead of tax returns. Built for borrowers whose taxable income understates actual earnings.
Not sure which option fits? That's what we're here for. There's no obligation in asking.
Self-employed mortgages have more moving parts. We're good at this. Talk to an Atlantic Bay Mortgage Banker who works with self-employed borrowers regularly.
Self-employed mortgage applications take longer and require more documentation than standard applications. That's not a red flag, it's just the nature of verifying income that isn't reported on a W-2. Here's the short version of what to plan for.
Self-employed pre-approval typically takes longer than salaried pre-approval. Starting three to six months before you want to buy gives your Mortgage Banker time to review your returns and work through any issues before you're on a contract deadline.
Personal returns and business returns, if applicable, are the foundation of a self-employed mortgage application. Having them ready, along with a year-to-date profit and loss statement, moves things significantly faster.
If you're buying in the next one to two years, let your accountant know. Write-off strategy can affect qualifying income, and a heads-up conversation gives you time to make intentional choices.
Once you're in the process, your Atlantic Bay Mortgage Banker reviews your returns, identifies add-backs, evaluates your loan options, and presents your file in the strongest possible way. You don't have to figure out the underwriting side, that's our job.
If your questions aren’t answered here, please reach out to an Atlantic Bay Mortgage Banker.
Possibly. Two years is the standard, but there are exceptions, particularly if you transitioned from a W-2 position in the same field. It depends on the loan program and your overall financial picture. Worth a conversation.
Could you be approved for a mortgage while self-employed?They can reduce your qualifying income, since lenders use your taxable net income from your tax returns. Some non-cash deductions like depreciation can be added back, and alternative programs like bank statement loans offer a different path if your tax returns significantly understate your actual earnings.
Generally, yes. Lenders want to see income that is stable or trending upward. One down year may be manageable depending on the circumstances. Two consecutive years of losses is a harder case. Your Mortgage Banker can look at your specific numbers.
A bank statement loan uses 12 to 24 months of business or personal bank deposits to calculate qualifying income, instead of tax returns. It's a non-QM product with different requirements and typically higher down payment expectations, but for the right borrower it opens a path that standard documentation doesn't.
Yes, with at least two years of documented history on your tax returns. If it supplements a W-2 income, it can increase your qualifying amount. If it's your primary source of income, you'll be treated as fully self-employed.
Learn more about side hustles and your down payment.
No. Sole proprietors who file a Schedule C qualify as self-employed under mortgage guidelines. You don't need an LLC or any other formal business structure.
Yes. Self-employed borrowers can qualify for jumbo loans, though documentation requirements and reserve expectations are higher. Your Atlantic Bay Mortgage Banker can walk you through what that looks like for your business structure.
Every topic on this page has a full guide. Pick what's most relevant to where you are right now.
How lenders view your income
The full income breakdown
Alternative income documentation
Add-backs and tax strategy
What to expect and how to prepare
The self-employed mortgage process has more moving parts than a standard application. There's more documentation, more nuance, and more room for things to get complicated if you're working with someone who doesn't do this regularly.
Atlantic Bay Mortgage Bankers work with self-employed borrowers across every business type and income structure. We know where complexity lives, and we know how to present your application in the strongest possible light. More importantly, we're going to be straight with you about where you stand, what your options are, and what, if anything, you should do differently before you apply.
That conversation starts whenever you're ready. Start the conversation. No cost, no commitment. Just real answers from someone who knows self-employed mortgages.
Disclosure: Information is for educational purposes only and should not be relied upon by you. Discussions regarding any financial information provided are not intended as individual recommendations and do not reflect the views or advice of Atlantic Bay Mortgage Group, L.L.C. The views expressed are subject to change at any time in response to changing circumstances in the market. Other loan program restrictions and eligibility requirements may apply. For refinances, the total finance charges may be higher over the life of the loan. Atlantic Bay Mortgage Group, L.L.C. disclaims any obligation to publicly update or revise any views expressed or information given. Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Housing Lender. Located at 600 Lynnhaven Parkway Suite 100 Virginia Beach, VA 23452.
