Answers · Self-employed
I have been self-employed for less than two years. Can I still buy a home?
Often, yes. Two years is the standard, not the law. Some programs accept one year of self-employment when you worked in the same field before, and some bank statement programs need only 12 months of statements. Under a year is hard, and I will tell you what the calendar looks like instead of just saying no.
Written by Andrew Malm, Senior Loan Originator, NMLS# 2663426. Last reviewed .
Lenders want two years because a new business is unpredictable. What changes their mind is evidence that you are not new at the work, only new at being the owner. An electrician who spent ten years on a crew and then opened a shop is a different risk than someone trying a new trade.
With one full year of tax returns as an owner and a history in the same line of work, some conventional and government loans are possible. With twelve months of business bank statements, some alternative documentation programs are too. Which one fits depends on what that first year looks like on paper.
If you recently moved from a W-2 job to a 1099 doing the same work for the same kind of client, say that clearly. It reads very differently than a career change, and some lenders treat it as continuous.
If you are under a year, the honest plan is usually to get ready: keep the business account clean, keep credit strong, save the down payment, and file a first return that tells the truth about your income. Then the first application is a strong one.
What I'd do
- Gather proof of your history in the field: old W-2s, a license, a resume.
- Open a business account now if you have not, and run the income through it.
- Before you file your first return as an owner, know that what you write off affects what you can borrow. Ask your tax preparer, then ask me.
- Ask for the date you will qualify. A clear not yet beats a vague no.
Have a situation that does not fit the article? That is most situations. See your options or text me at 763-373-9360.
One conversation changes the picture.
Seeing your options is free, with no hard credit pull to start.