If you’re self-employed and you’ve been told you can’t get a mortgage — or that you need to wait — I want you to know something: that’s not true.
I’ve been doing this for over 15 years and I can’t tell you how many self-employed borrowers have come to me after being turned down somewhere else, frustrated, thinking they’re out of options. A lot of times the loan originator they were working with just didn’t know the programs. That’s the honest truth.
The reality is that self-employed borrowers have more mortgage options available right now than at almost any other point I can remember. You just have to know they exist — and work with someone who actually understands how to use them.
Let me break down exactly what’s available to you right now in 2026.
The Problem Self-Employed Borrowers Run Into
Here’s the thing most self-employed people already know but get frustrated by: you make good money, but your tax returns don’t always show it.
And I get it. You have a good CPA. They’re doing their job — minimizing your tax liability. That’s what you’re paying them for. But when a traditional lender looks at your Schedule C or your K-1 and sees a low net income because of write-offs, depreciation, mileage, meals — they see someone who doesn’t make enough money to qualify.
That’s not the whole picture. It’s not even close to the whole picture. But most lenders stop right there.
We don’t.
Your Self-Employed Mortgage Options in 2026
I want to walk through every major option we have available right now, because there are several paths depending on your situation. Not every one will apply to you, but at least one probably will.
Option 1: Conventional Financing With 1 Year of Tax Returns
Before we go anywhere else, let’s make sure we can’t get you approved through conventional financing first. That’s always going to be your best rate.
Here’s what a lot of originators don’t know — if you’ve been self-employed for 5 years or more, we can get you approved through Freddie Mac using only your most recent year of tax returns instead of averaging the last two years.
Why does that matter? Because if you had one rough year and one great year, averaging kills you. But if your most recent year was strong, we can use just that one. It’s a huge deal for self-employed borrowers and most loan officers don’t even know this guideline exists.
- Minimum down payment: 5% for a primary residence
- Self-employment history needed: 5+ years (for 1-year tax return option)
- Best for: Borrowers whose most recent tax year was strong
Additionally, we can add back depreciation and half your meals and entertainment deductions. On a Schedule C or corporate return, that can move the needle significantly.
Option 2: Bank Statement Mortgage Program
This is the big one. If your tax returns just aren’t going to work no matter how you slice them, the bank statement program is probably your best path forward.
Here’s how it works: instead of looking at your tax returns, we look at 12 to 24 months of your bank statements — either personal or business. We calculate your income based on your deposits. That’s it. We don’t even look at your tax returns.
For a lot of self-employed borrowers, your bank deposits tell a completely different story than your Schedule C. And that’s the income we use to qualify you.
- Minimum down payment: 10% with a 680+ credit score, 30% with a 600+ score
- Self-employment history needed: 2 years (or 1 year if you were in the same line of work before)
- Can be used for: Primary residence, second homes, AND investment properties
- Income calculation: 50%–90% of your deposits count as income, depending on your business type
Option 3: 1099 Income Program
If you’re an independent contractor — maybe you drive for yourself, do freelance work, or get paid on a 1099 — this one is for you. Instead of using tax returns or bank statements, we use your actual 1099 forms to calculate income.
Lenders on this program typically use the gross income on your 1099s to qualify you. If you’ve been getting consistent 1099 income for at least the last couple of years, this can be a straightforward path to approval.
- Minimum credit score: Typically 620–660
- Income history needed: 2 years of consistent 1099 income
- Best for: Independent contractors and freelancers with clean 1099 history
Option 4: Don’t Forget — FHA, VA, and USDA Still Work Too
Here’s something people forget. Just because you’re self-employed doesn’t mean you can’t use FHA, VA, or USDA financing. If your tax returns actually support the income you need, these programs are still on the table.
FHA lets you buy with as little as 3.5% down with a credit score of 580. VA is still $0 down for veterans. USDA is $0 down in eligible areas. Being self-employed doesn’t disqualify you from any of these — you just have to be able to document income through traditional means.
Sometimes with a little planning with your CPA on next year’s returns, you can position yourself to qualify with one of these programs. That’s a conversation worth having and I’m happy to walk you through what the numbers would need to look like.
How We Compare Income: A Real Example
Let me show you why the program you choose matters so much. Say you’re a self-employed contractor — you own a small business, been at it for 6 years. Here’s what your numbers might look like:
| Income Method | How It’s Calculated | Qualifying Income |
|---|---|---|
| Tax Returns (2-year average) | Net income from Schedule C, averaged over 2 years | $52,000/year |
| Tax Returns (1-year, Freddie Mac) | Most recent year only + add-backs for depreciation, mileage, meals | $74,000/year |
| Bank Statements (12 months) | Average monthly deposits × expense factor (say 60%) | $91,000/year |
| 1099 Income | Gross 1099 income from most recent year | $105,000/year |
Same borrower. Same business. Four completely different qualifying incomes. The difference between getting approved and getting denied could literally be which program your loan originator knows about.
This is why it matters who you work with.
What About Interest Rates on These Programs?
I want to be straight with you here because I think transparency matters. Conventional financing is always going to give you the best rate. If we can make your tax returns work through conventional, that’s the play.
Bank statement and 1099 programs are considered non-QM (non-qualified mortgage) loans. The rates on these are going to be higher than a conventional mortgage — typically somewhere between half a percent to two percent higher, depending on your credit score, down payment, and loan amount.
Is it a perfect rate? No. But here’s how I think about it: a slightly higher rate on a home you’re building equity in is a whole lot better than a perfect rate on a mortgage you never got because someone told you that you didn’t qualify. You’re in the home, you’re building wealth, and when your situation changes — when rates come down or your tax returns improve — you refinance. Simple. I actually wrote a whole post about whether it makes sense to wait for rates to drop — the short answer is usually no.
The 5 Biggest Myths About Self-Employed Mortgages
“I write off too much on my taxes — I’ll never qualify for a mortgage.”
You have options beyond tax returns. Bank statement programs, 1099 programs, and the Freddie Mac 1-year option all exist specifically for borrowers in your situation. Your write-offs help you at tax time. They don’t have to stop you from buying a home.
“I need to be self-employed for at least 5 years to get a mortgage.”
Not true. The 5-year rule only applies to the 1-year tax return option through Freddie Mac. For bank statement programs you need 2 years of self-employment — and if you were in the same line of work before going out on your own, we can sometimes use just 1 year. For conventional and government loans using full tax returns, 2 years of self-employment history is the standard.
“Bank statement loans require 30% down.”
Not necessarily. With a 680+ credit score you can put as little as 10% down on a bank statement program. The 30% minimum only applies to lower credit scores. Your credit profile makes a big difference here.
“I got denied by my bank, so I’m out of luck.”
Banks and big retail lenders typically only offer conventional and government loan programs. They don’t have access to bank statement or 1099 programs. A mortgage broker like us works with multiple lenders across different program types. Getting denied at a bank doesn’t mean you’re denied everywhere — it usually means you talked to the wrong person.
“These alternative programs are sketchy or predatory.”
Bank statement and 1099 programs are legitimate, regulated loan products. They’re not the same as the “stated income” loans that caused problems before 2008. You still have to prove your income — just through different documentation. These are real loans with full underwriting, and they’re designed for the reality that tax returns don’t always tell the full story of a self-employed person’s finances.
What Do I Need to Get Started?
The honest answer is: less than you probably think. Here’s what to have ready when you reach out:
For Any Program
Valid ID, your most recent credit report (or we’ll pull it), and a general idea of what you’re looking to buy — price range, location, primary vs. investment.
For Conventional / FHA / VA / USDA
1–2 years of personal and business tax returns with all schedules. If you have a corporation, the business returns too. See our full documents needed checklist.
For Bank Statement Program
12–24 months of personal or business bank statements. Proof of 2+ years of self-employment (business license, CPA letter, etc.).
For 1099 Program
1099 forms from the last 2 years. Bank statements to verify deposits match your 1099 income.
Don’t stress about having everything perfect before you call. The whole point of the pre-approval process is to figure out where you stand and which program fits best. I’ve had plenty of borrowers come to me thinking they needed a bank statement loan and we end up qualifying them conventionally — saves them money on the rate. You don’t know until we look at it together.
Why a Mortgage Broker Makes a Difference for Self-Employed Borrowers
I want to say this because I think it matters — and I’m obviously biased, but I believe it to be true.
If you’re a W-2 employee with straightforward income, honestly, most any lender can probably get you approved. Your file is clean and simple.
But if you’re self-employed, the lender you choose can be the difference between buying a home this year and being stuck renting. A bank typically has one set of programs. A retail lender has their own products. A mortgage broker works with multiple lenders and has access to conventional, government, and non-QM programs all under one roof. Take a look at all of our available loan programs to see the range of what we offer.
I don’t say that to bash anyone. I say it because I’ve seen too many self-employed borrowers waste months going down the wrong path with someone who only had one tool in the toolbox. When all you have is a hammer, everything looks like a nail. When you have access to the full range of programs, we can actually find the right fit.
Self-Employed and Ready to Buy?
Let’s figure out which program works for you. Pre-approval is free, takes less than 24 hours on weekdays, and there’s no commitment. If you qualify — great. If you don’t yet, I’ll tell you exactly what needs to change and how long it’ll take.
Apply for Pre-Approval Call Keith: (352) 615-1613Frequently Asked Questions
Can I use a bank statement loan to buy an investment property?
Yes. Bank statement programs can be used for primary residences, second homes, and investment properties. If you’re a self-employed investor looking to build a portfolio, this is a great tool. We also have DSCR (debt service coverage ratio) loans for investors where we qualify you based on the property’s rental income rather than your personal income.
How long do I need to be self-employed to qualify?
For conventional and government programs, 2 years is the standard. For bank statement programs, 2 years — but we can sometimes use 1 year if you were in the same line of work before going self-employed. For the 1-year tax return option through Freddie Mac, you need 5 years of self-employment history.
Will my business partner’s income count?
It depends. If you own at least 25% of the business, your share of the income can be used. For bank statement programs using business accounts, you generally need at least 50% ownership. The details of your partnership structure matter here — it’s something we’d work through during pre-approval.
What credit score do I need?
For conventional financing: 620 minimum. For FHA: 580 with 3.5% down. For bank statement programs: 600 minimum, but a 680+ unlocks the best terms including 10% down. For 1099 programs: typically 620–660. Your score affects not just approval but your rate and down payment requirements. If your credit needs some work, we also have access to down payment assistance programs that can help once you’re ready.
Can I still get a mortgage if I’ve only been self-employed for 1 year?
Possibly. If you were in the same line of work as a W-2 employee before going self-employed, some programs — including bank statement loans — can accept 1 year of self-employment history. For instance, if you were a plumber for a company and then started your own plumbing business, that continuity counts. This is evaluated case by case.
Should I talk to my CPA before applying?
If you’re planning to buy in the next 6–12 months and you’re about to file taxes, absolutely yes. A conversation between you, your CPA, and your mortgage broker can help you make strategic decisions about how to file that position you for the best loan program. We do this regularly and it can save you thousands over the life of the loan.
Related Reading
If you found this helpful, check out some of our other guides:
- Should I Wait For Mortgage Rates To Drop Before Buying a Home in Florida?
- Bank Statement Mortgage Program — Full Details
- Manufactured Home Financing in 2026: Everything You Need to Know
- Buy a Second Primary Residence for Your Parents
- Down Payment Assistance Programs in Florida
- Temporary Rate Buydown — How It Works
- Home Buyer’s Survival Guide
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