If you’re self-employed and in the market for a new home or looking to refinance your current home, you may be wondering what self-employed mortgage loan programs are available to you. While self-employment doesn’t necessarily make it more difficult to qualify for a mortgage, there are some programs that may be more beneficial for borrowers who are their own boss. In the following paragraphs, I’ll help you understand the requirements to get a mortgage loan when you’re self-employed, what documents you need and give you more information about the top three mortgage loan programs for self-employed borrowers.

Self-Employed Mortgage Loan Requirements

Self-employed borrowers looking to get a loan must meet certain self-employment mortgage loan requirements to be approved. Generally, self-employed borrowers must have at least two years of business income records and prove that their income is consistent and reliable. Depending on the type of loan you are seeking, lenders will require additional documentation to verify past and current income. Additionally, borrowers must demonstrate that they have good credit scores and a stable work history to be approved for a self-employed mortgage loan.

What is Considered Self-Employed?

Borrowers are considered self-employed when they own 25% or more of a business or act as a sole proprietor. Borrowers who are contracted employees and receive 1099 income or commissions are also considered self-employed.

How Many Years Self-Employed Mortgage?

Generally, borrowers must have been self-employed for two years or more to qualify for most types of mortgage loans. However, some applicants who have only been self-employed for one year, can demonstrate a consistent income, have good credit and have a down payment may be able to qualify. Additionally, those with shorter business histories who can show previous experience or specialized training may qualify for a mortgage loan. It is important to know which loans you may qualify for and working with a loan officer can ensure you meet the qualifying criteria and self-employed mortgage loan requirements for a loan.

Self-Employed Mortgage Documents

Self-employed borrowers who are applying for a mortgage loan must provide certain documents to be approved. These documents usually include personal and/or business tax returns, proof of income, bank statements and other financial documents as required by the lender. Additionally, self-employed borrowers may need to provide additional documentation such as business licenses, recent profit and loss statements, and other documents related to their line of work. All these documents will be used to verify your income and the likelihood of continued earnings.

Conventional Home Loan

Conventional home loans are a great self-employed mortgage loan option because they can often be more flexible. For example, in cases where a borrower has been self-employed for more than five years with the same business, only one year of tax returns may be required. If you haven’t been in business for more than five years, but have good credit and a sizable down payment, you may only be required to document the most recent tax year of your income. With lower interest rates and more flexible terms, conventional home loans offer advantages compared to other types of loans. Additionally, conventional home loans may be used for purchasing or refinancing a primary residence as well as investment properties, allowing self-employed borrowers to enjoy the benefits of real estate investment.

All in all, conventional home loans provide a flexible and cost-effective solution for self-employed borrowers looking to purchase their dream home or refinance their mortgage.

Bank Statement

Bank statement loans are also an attractive self-employed mortgage loan option and can be used by contract or 1099 borrowers who may not have standard pay stubs or W2 forms to demonstrate their income. Bank statement loans use the borrower’s bank statements to verify income instead of having to produce other documents like tax returns. This makes it much easier to qualify for a self-employed mortgage loan when business bank deposits are the best method for verifying income. Furthermore, bank statement loans still come with competitive interest rates, flexible terms, and a streamlined documentation process. This makes them an ideal solution for self-employed borrowers who may not qualify for financing under a conventional loan or other loan programs.

Jumbo Home Loans

Jumbo home loans can also be an excellent financing option for self-employed borrowers. While Jumbo loan programs are usually only associated with higher loan amounts, some Jumbo loan investors have lower minimum loan amounts than the conforming loan limit. While Jumbo loans typically come with higher interest rates than conventional mortgages, they can offer more flexible terms than other types of self-employed mortgage loans. Additionally, Jumbo mortgage loans provide access to larger loan amounts so borrowers can purchase a more expensive property or take advantage of competitive refinance options. Borrowers should carefully evaluate their available options with a loan officer and not discount a Jumbo home loan as an option. It’s important to ensure the terms and rates are favorable for your needs.


Self-employed borrowers need to provide various documents to get approved for a self-employed mortgage loan. This may include tax returns, proof of income, bank statements, business licenses and other financial documents. By carefully gathering all the necessary paperwork and providing them to lenders, self-employed borrowers can ensure that their loan application is processed quickly and efficiently. I believe the three best self-employed mortgage loans for borrowers are conventional loans, bank statement loans, and Jumbo loans. Each of these loan programs offer unique features that can benefit borrowers, such as competitive interest rates, flexible repayment schedules, and special requirements tailored to the borrower’s individual situation. By researching the individual self-employed mortgage loan requirements of each loan type, borrowers can determine which loan program is best suited for their needs.

self employed mortgage loan
I enjoy sharing my experience gained originating mortgage loans since 2003. When not helping borrowers with their mortgage needs, I enjoying spending time with family and friends. You can learn more about me here.