- [Mortgage Tips]() [Home]() > [Blog]() > Can You Get a Mortgage with One Year of Self-Employment? # Can You Get a Mortgage with One Year of Self-Employment? September 23, 2026 [Schedule a consultation **]() **Get a quote** First step ** Only takes 1 minute ## Select a loan type - ** Personalized quote - ** Expert guidance Or [Schedule a consultation **]() ## Is Self-Employment a Barrier to Getting a Mortgage? Self-employment has always been a staple of the American dream. What can be more attractive than being your own boss and making life and business choices yourself? However, this pillar of freedom and self-reliance may become an obstacle on the way to another core element of the American dream – owning a home. Of course, if your business earns you enough money to buy a dwelling for a lump sum, you can celebrate the housewarming party as soon as you like. Problems start when you need a mortgage to purchase the property. ## Mortgage Options for the Self-Employed Self-employed individuals (those who own at least 25% of a business that provides their main income) don’t qualify for [traditional mortgage loans](). Why? Because basic financial documents applicants for such loans submit are [pay stubs]() and the W-2 form. Both are issued by the employer and contain information on the employee's earnings, deductions, and taxes over a certain period. Since a self-employed person is the employer and the employee rolled into one, they can't issue the document to themselves. Given the fact that the self-employed make up [approximately 10%]() of US residents, it's quite natural that lending agencies can't leave this 30+ million-person consumer pool without an opportunity to buy a house. There are several types of [self-employed mortgages]() opening the door wide to homeownership for this segment of society. However, self-employed individuals face certain limitations when applying for any of these loan types. And the most serious of them is having at least two years of self-employment under your belt. What if you are a year shy of this period? ## Getting a Self-Employed Mortgage with One Year of Working in This Labor Category No universal rule or state/federal law tells you what to expect when you apply for a mortgage with only one year of self-employment. Each lending agency has its own policy regarding such customers. Moreover, each case is viewed separately because details and circumstances differ. What are the typical mortgage requirements for this category of self-employed people? - A two-year track record in the same industry or employment in a similar sphere. Such experience is easy to prove if you first worked as an employee in a, say, IT company and then moved on to become a freelance web designer or founded your own software development firm. But if you are a former staff assistant of a high-tech firm turned independent app developer, a lending agency is unlikely to give you a loan. Anyway, relevant employment should be proven by a documented income that is at least equal (and preferably greater) to the one you received as a W-2 worker. - One year of related employment plus one year of training or education in the field. Documents that verify formal education are diplomas, degrees, certificates of completion, official transcripts, or industry-recognized credentials (licenses or trade certificates). - Full tax year documents. These include one complete tax cycle or business accounts covering 12 months. - Sufficient credit score. For conventional loans, the index should be at least 620, while [FHA loans]() can be extended to people with 580 points. - The debt-to-income (DTI) ratio should be below 45%. Although some lenders will agree to 50% in case you have substantial cash reserves. - Down payment of up to 10%. Some types of [non-QM loans]() require an even higher percentage. - Cash reserves that equal several months’ worth of mortgage payments. All these conditions, documents and proofs come as an addition to the standard paperwork that holds true for any person applying for a self-employed loan. Also, it is important to understand that what you have read is a garden-variety list of prerequisites for getting a self-employed mortgage. To learn what you are up to in your specific situation, you should consult [competent experts in the mortgage industry](). ## How LBC Mortgage Can Help You Having worked in the US mortgage market for 18 years, we have provided hundreds, if not thousands, of loans both to traditional W-2 workers and self-employed individuals across 11 states and nationwide. Our self-employed mortgage portfolio includes [bank statement loans](), [asset depletion loans](), [1099 loans](), and [P&L loans](). [Contact seasoned specialists at LBC Mortgage]() to receive qualified advice regarding your unique self-employment use case and obtain necessary assistance along your home-owning journey. ## Getting a Mortgage as a One-Year Self-Employed in a Nutshell A self-employed American is a person who earns their main income from a business in which they own at least a quarter. They can't provide the pay stubs or W-2 forms needed for a standard mortgage, so self-employed loans are often the only option if they want to buy a house. To get such a loan, they should have at least two years of working as a self-employed individual. If you have only one year of self-employment experience, you can apply for a mortgage by proving two years of experience working in the same or a related domain. Some agencies agree to extend a mortgage on the condition that the self-employed applicant has one year of related work plus formally verified education or training in this field. Since each lending agency has its own rules and policies, it is best to consult its personnel for qualified advice. Make your next move ### What could your mortgage look like? Turn your plans into a conversation. Explore loan options with guidance from LBC Mortgage. [Get my personalized quote **]() **Author:** [Alex Shekhtman CEO & Founder, LBC Mortgage]() [** Previous Post]() [Next Post **]() ## Frequently Asked Questions - ### 1. What categories of workers are considered self-employed individuals? ** These are people who earn the lion’s share of their income by owning at least 25% of their business. Typically, those are business partners, LLC members, single-owner small businesses, independent contractors, freelancers, and gig workers. - Business partners. They have a share in the company’s profits because they own it together with other people. As often as not, they participate in running such firms as well. - Limited Liability Company members. They have a separate financial account for their [LLC in real estate](), e-commerce, construction, IT, etc. This protects their personal assets if someone files a lawsuit against the organization. - Single-owner small businesses. As a rule, such sole proprietors work without a physical storefront and operate in their own service area. Here belong electricians, locksmiths, gardeners, landscapers, home repairers, plumbers, HVAC technicians, hair stylists, event organizers, and other specialists. - Independent contractors. They operate under long-term agreements with one consumer, often working on commission (such as attorneys, stock brokers, insurance agents, accountants, real estate agents, etc.). - Freelancers. These are hired for short-term jobs and can service several clients simultaneously (for instance, copywriters, app developers, proofreaders, photographers, graphic designers, etc.). - Gig workers. They are hired for one-off tasks and errands, such as grocery shopping, dog walking, delivery, translation, and more. Sometimes, one self-employed individual may fall within several categories by combining gig jobs with freelancing. - ### 2. What documents do self-employed workers need to get a mortgage? ** The four red tape pillars for getting a self-employed mortgage are tax and income documents, financial records, business verification, and personal verification. Tax and income documents include: - Business tax returns. Depending on your company’s nature and tax specifics, you should submit Form 1065, Form 1120, or Form 1120S. - Personal tax returns. Form 1040 containing all schedules for the past 24 months. - Profit & Loss Statement plus a balance sheet. - 1099 Form (if you are a freelancer or independent contractor). - The signed IRS Form 4506-T. Having this document, lenders can obtain your tax transcripts directly from the IRS sources. The two major financial records are: - Business bank statement. Some agencies demand that it cover 12 months, while others require 24 months. This helps ensure the consistency of your company’s cash flow. - Personal bank statement. It serves as asset and down payment verification and should cover the last two or three months. Business verification documents include: - CPA letter. In it, a licensed accountant confirms your current self-employment and business ownership percentage. - Business license. A state or federal document certifying the legality of your business operations. - Entity documents. Here belong partnership agreements, Doing Business As (DBA) certificates, and articles of incorporation. For US citizens, the two basic personal verification documents are: - A government-issued ID with a photo. Usually, a valid driver’s license, a state ID, or a passport. - Social Security Number (SSN). It is verified via your tax documents or Social Security card. - ### 3. What is the procedure for getting a self-employed loan? ** The roadmap for getting a self-employed mortgage includes confirming your self-employment status, gauging your budget, choosing a lender, gathering documents, and applying for a loan. At first, figure out if you qualify as self-employed. To be one legally, you should own no less than 25% of your business, receive 1099 income for services you provide, or have your income documented in the Schedule C section of personal tax returns. The second stage is assessing how much you earn each month and whether you can make monthly payments while still having enough left for other needs. Once you make sure you can afford it, shop around for a lender and compare rates, terms, and requirements. Then, visit the ones with the most attractive offers and get a consultation for your specific situation. As soon as you know who you will work with, learn the list of necessary tax, income, financial, business, and personal verification documents and collect them. Once you have all the required papers on hand, submit the application (in person or online). The loan agreement you receive from the agency should be read thoroughly (including the fine print) before you sign it. Your home. Your goals. Your next step. ## Let's find a loan that fits *your life.* Buying or refinancing? Start with your goals. We'll help you explore the possibilities. [Get my personalized quote **]() [Schedule a consultation]() ** Only takes 1 minute · Personalized to you ### Get in Touch Whether you’re buying a home or are ready to refinance, our experts are here to help. [** Call us now]() [** Book a consultation]()