Self-Employed 2023

No Income Verification

No income verification mortgage is a home loan that does not require income documentation unlike typical conventional loans that require pay stubs, W2’s or tax returns. This type of loan requires a larger down payment than a conventional loan because of the lack of income verification with a minimum 20% down payment depending on your credit score. A no income verification mortgage is ideal for individuals that are between jobs, if your debt-to-income is too high, individuals with plenty of assets but no verifiable income or don’t meet standard income verification for conventional loans.

Bank Statement 

Bank statement program is designed for self-employed borrowers that cannot qualify using the net income on their tax returns. Eligible borrowers can be owners of a company, 1099 employees, sole proprietor or individuals that make regular deposits into their business or personal bank accounts. The program requires either 12 months or 24 months consecutive bank statements and depending on the type of business or service the program uses up to 80% of deposits to qualify for a mortgage. Minimum 10% down payment depending on your credit score.

Profit and Loss Statement

Profit & Loss income statement covering 12 or 24 months is used to qualify for a mortgage. You must be self-employed for at least two years verified by two years of business licenses or tax preparer letter. Tax preparer letter must be provided to show the borrower’s percentage of business ownership. The borrower or tax preparer must provide a signed letter of explanation describing the nature of the business, how income is generated, and how long the business has been in existence. Profit and Loss statements must be prepared and signed by a third-party licensed or registered tax preparer. Tax preparers must be a Certified Public Account (CPA), Enrolled Agent (EA), hold a state license for tax preparation. Minimum 10% down payment depending on your credit score. IRS form 4506-C is not required for income documented with profit and loss statements.

1099 Income

Self-employed borrowers with 1099 earnings, such as independent contractors may submit 1 or 2 years 1099 forms to qualify for a mortgage. Borrowers must be self-employed for at least two years verified by two years of business licenses or a tax-preparer letter. Multiple 1099 forms from the same line of work may be added together, for example a borrower with earnings from Lyft and Uber will be qualified based on combined earnings. Multiple 1099 forms from different industries will be reviewed independently as separate businesses, for example a borrower with earnings from Uber and courier driver must have a two-year history in each line of work to consider earnings from both sources. No pay stubs, no W2’s and no tax returns are required. Minimum 10% down payment depending on your credit score.

One year tax return

In lieu of the standard 2-year documentation requirement for wage-earners and self-employed borrowers, the following will be accepted:

• Wage-Earners: the transcript(s) for most recent year W-2(s) and pay stub(s) covering the most recent 30-day period providing year-to-date earnings at closing
• Self-Employed Alternative Doc: the most recent year filed federal income tax returns (personal and business; extensions are not allowed) and year-to-date P&L if end of applicable tax year is > 120 days from closing

Minimum 10% down payment depending on your credit score.