Self-employed mortgage products can mean the difference between buying now or later. The freedom of being self-employed is priceless — but qualifying for a mortgage when your tax returns don’t reflect your real earnings doesn’t have to be a dead end.

Understanding Self-Employed Mortgages

Typically creditors other than mortgage lenders understand that you may not be showing much net income as a business owner because of tax write-offs. When it comes to buying a home, however, it’s a different story. We know and understand your true income might not reflect the standard of living that your net income on your tax returns shows. Fortunately, we now have self-employed mortgage options for you to take advantage of.

Technically a self-employed borrower can utilize any loan program available — but if you can’t qualify based on what shows on your tax returns, you need to know your alternative options.

Self-Employed Loan Program Comparison

Three primary paths for self-employed borrowers in Florida — each with different documentation, down payment, and credit requirements:

Feature	Conventional	Bank Statement	DSCR (Investment)
Income Verification	Tax returns (1-2 years)	12-24 months bank statements	Property cash flow only
Tax Returns Required?	Yes	No	No
Min Down (Primary)	5%	10% (680 FICO) / 30% (600 FICO)	Investment only
Min Down (Investment)	Not allowed	20-30%	20%+
Min FICO	620	600 (with 30% down)	660+
Years Self-Employed Required	2 years (or 1 with 5+ year history)	2 years	None — uses property cash flow
Income Add-Backs Allowed	Yes (depreciation, mileage, meals)	50-90% of deposits used	Not applicable
Max DTI	45-50%	50%	Uses DSCR ratio (1.0+ typical)
Property Types	Primary, second home	Primary, second home, investment	Investment only
Best For	SE borrowers with strong tax-shown income	SE with significant write-offs	Real estate investors

Quick read: Conventional is cheapest if your tax returns support the qualification. Bank statement is the workhorse for self-employed borrowers whose write-offs hide real earnings. DSCR is purely for investment property buyers who’d rather qualify on the rental income than their personal returns.

Conventional Self-Employed Mortgage Options

Before you use an alternative self-employed mortgage, making sure you can’t use conventional financing is important.

When using conforming conventional financing, your loan either gets automatically underwritten through Fannie Mae or Freddie Mac. If you have been self-employed for at least 5 years or more, through Freddie Mac we can get a self-employed borrower approved using one year of their most recent tax returns. That’s important because otherwise you would need 2 years of tax returns and the underwriter would average the income between those two years.

So if you’ve had a great recent year, or if you plan ahead with your CPA, your most recent tax return could do the trick in getting you approved for a self-employed mortgage utilizing conventional financing. The minimum down would be 5%. Any other self-employed options requiring alternative documentation would require a minimum of 10% down. You also need someone good to review the income — we can add back in depreciation and half of your meals and entertainment deductions. This can be done on your Schedule C or your corporate returns.

Self-Employed Bank Statement Program

If you have been self-employed for at least 2 years, you can use your bank statements for income with a bank statement mortgage. Either 12-24 months of your personal bank statements or 12-24 months of your business bank statements. Only your deposits are calculated for income — debits and net balance are not used.

Your score must be 600 to qualify, and you have to have a minimum of 30% down. For 10% down, currently a 680 credit score is needed. More is required for lower credit scores. This program can be used for primary residences, second homes, or investment properties. We wouldn’t even look at your tax returns. The debt that shows up on your credit and any other property owned would be included in your debt ratios with a max up to 50%.

This is an excellent program for self-employed borrowers who couldn’t find financing elsewhere. One additional note: if you can prove you were in the same line of work prior to being self-employed, we can use 1 year of self-employment instead of the standard 2.

Self-Employed Debt Calculations

When using conventional or any other government loan program, it’s important to remember a couple of things. First, when calculating your debt ratios as a self-employed borrower, there are certain items we can add back in for usable income. This is the case for using conventional or any other financing method besides a bank statement program or a stated income program.

For instance, if you are using a Schedule C, then a portion of your mileage deduction can be added back in as usable income — along with depreciation, and a portion of a couple of other items. It’s important to have an expert take a second look at your tax returns if a loan originator has told you that you don’t make enough money. There are options out there, and the level of nuance in regards to the guidelines for self-employed mortgage loans is quite in-depth.

Additionally, if you have a K-1 from a corporation you own or are part owner of, and there was a significant one-time deduction that can be properly documented and isn’t likely to happen again for the foreseeable future, that can be added back in as usable income.

When using bank statements for income, a portion of your deposits will be used as income — anywhere between 50%-90% of your deposits, depending on the type and size of your business. DSCR (debt service coverage ratio) loans might be a good option for you as well, especially if you’re buying investment property.

How We Help Self-Employed Florida Borrowers

Self-Employed Mortgage FAQ

Get a No-Hassle Self-Employed Pre-Approval

Send us your scenario — how long you’ve been self-employed, what your tax returns look like, your FICO, and what kind of property you want to buy. We’ll run conventional, bank statement, and DSCR side-by-side and tell you which loan program you qualify for and which one saves you the most. On weekdays we review applications within 24 hours or less.