SELF EMPLOYED BORROWERS
Many business owners and self-employed borrowers face special challenges when seeking financing for a home in 2026. There are a variety of programs available to self-employed borrowers, and Five Stars Mortgage is proud to offer them all to our clients. Working with business owners and entrepreneurs is very exciting and we take pride in being able to offer aggressive loan programs to our self-employed buyers. Please read on as we dig deeper into the choices and special circumstances of the self employed and their loans.
The Self Employed Loan
Self-employed borrowers are no more or less risky than salaried or W-2’d workers. The main challenge for the self-employed is documenting work history and income. This is the biggest difference between a conventional borrower and a self-employed borrower. How can borrowers document their income and work history?
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Last 2 years personal and business tax returns
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Proof of 2 years self-employed by showing either a business license or with a CPA letter
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Personal and or Business Bank statements
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Year to date profit and loss report
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Credit references if needed for business
On a fully documented loan such as this, the lender will consider the “net” income of the individual after deductions. This can be a challenge for some small business owners. Please note – any new business owners (1099) must have a min 2 year history before applying.
Self-employed buyers also have an option to qualify based on their actual business bank deposits. This is known as a bank statement loan and can be an alternative for those who have challenges documenting income via traditional tax returns. The program is available up to 90% financing.