What types of mortgage options are available for self-employed individuals?

We offer a variety of mortgage solutions tailored for self-employed professionals, including bank statement loans, asset-based mortgages, 1099 income loans, and non-QM loans. Each is designed to accommodate different aspects of self-employed income. Talk to a Mortgage Advisor

What documents do I need to apply for a mortgage as a self-employed individual?

Generally, you'll need to provide 12 to 24 months of bank statements, 1099 forms if applicable, documentation of liquid assets, and possibly a profit and loss statement. The specific documents may vary based on the type of loan you choose. Let's discuss how your unique income can work towards securing your mortgage.

How does my credit score affect my mortgage application as a self-employed person?

A good credit score is crucial as it influences the terms and interest rates of your mortgage. Most of our programs require a minimum credit score of around 620, but higher scores can lead to better loan conditions. Reach out to us to discuss how we can work with your unique financial history.

Can I qualify for a mortgage if I've been self-employed for less than two years?

It can be challenging, but not impossible. We assess each applicant individually and may consider other factors like your previous employment history, industry experience, and the overall financial health of your business. Talk to an expert now.

Do I need a large down payment as a self-employed borrower?

The required down payment varies by loan type, typically ranging from 10% to 20%. However, we strive to find flexible solutions that fit your financial situation. Speak to an Advisor.

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Mortgage Options for Self Employed Borrowers

We shop 100+ lenders to find you the best mortgage options.

1. Bank Statement Loans

Who It's For: Self-employed individuals, freelancers, or business owners.

Income Proof: 12-24 months of personal or business bank statements are used to verify income instead of W-2s or tax returns.

Advantages: Flexibility in income calculation; suitable for those with high write-offs.

2. P&L Loans

Who It's For: Self-employed individuals, or business owners who may not have traditional income documentation.

Income Proof: Instead of W-2s or tax returns, lenders use a 12–24 month CPA-prepared Profit & Loss statement to verify income and determine loan eligibility.

Advantages: Ideal for borrowers with significant write-offs who want to show true business performance.

3. 1099 Income Home Loans

Who It's For: Independent contractors or freelancers who receive 1099 forms.

Income Proof: 1099 forms from the past 1-2 years are used to demonstrate income.

Advantages: Easier qualification for those with consistent 1099 income; no need for traditional W-2s.

4. Asset Based Home Loans
(No Doc/No Income Verification)

Who It's For: Borrowers who prefer not to disclose their income.

Income Proof: No income verification required; approval is based on credit score, assets, and down payment.

Advantages: Simplifies the approval process; suitable for high net-worth individuals with multiple income streams.

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Recently Funded Homes

From denied applications to signed contracts, here’s what we’ve funded lately.

Loan Amount: $750,000

5060 Loma Alta Dr, Frisco, TX 75034

Christopher Aaron

Loan Amount: $720,000

1503 Fox Sparrow Trl, Cedar Park, TX 78613

Nathan Hekman

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What are the eligibility requirements for self employed loans in 2025?

You’ll still need to meet the minimum mortgage requirements that apply to all borrowers, but lenders will scrutinize your finances more closely.

See Minimum Loan Requirements

Guidelines vary from lender to lender, but the factors often used to determine the financial health and viability of your business include:

→ How the business operates
Lenders want to ensure that your business is financially sound.

An underwriter may research the location and type of business you’re in, how much demand there is for your product and how likely your business is to stay financially strong and profitable.
→ Personal income vs. business income
If you’re using income from your business to qualify for a loan, your lender may want to see evidence that your business has a healthy cash flow and isn’t buried in debt.

Personal income is typically verified with individual tax returns.
→ Your income stability
A lender may consider you to be at higher risk of missing mortgage payments if your earnings tend to vary from month to month.

That’s why some lenders ask for additional proof that your business is stable and that you have enough cash flow to handle a lower-earning month.
→ How long you’ve been self-employed
A lender prefers for you to have at least two years of experience earning income from self-employment.

The approval process may be simpler, however, if you’ve been in business for at least five years.

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What forms/documents do I need for a self employed home loan?

For self-employed people looking for a mortgage, lenders typically request documents that provide a clear picture of your income stability and business viability.

- Personal Tax Returns
Your two most recent tax returns help demonstrate steady self-employment earnings.

However, some lenders may be satisfied with just last year’s tax return if you’ve been self-employed for at least a year.
- Profit and Loss Statements
Also called a P&L for short, this financial statement shows how much total profit you’ve made after subtracting your business expenses.

Lenders expect these documents to show earnings similar to or higher than what you listed as income on your tax returns.
- CPA Letters
Lenders may ask your certified public accountant (CPA) for a letter of explanation to verify your self-employment status.
- Documentation of Business Funds used for a Down Payment
If you want to use cash that’s in your business accounts to fund the down payment on a home, be prepared to provide extra documentation.

You may need business bank statements and tax returns, as well as a letter from your CPA or tax lawyer confirming that taking the funds won’t harm the business.
- IRS Transcripts
You may be asked to sign a form (IRS Form 4506-T) authorizing your lender to obtain a transcript of your tax return.

They’ll typically use it to verify that the information you provided in your loan application matches what’s in the IRS database.
- Business Tax Returns
The business tax returns you need to gather will depend on how your business is structured.

Here’s a breakdown of which forms you’ll likely need, depending on the type of business you operate.

See Doc Requirements Based on Business Type

How are we different from other lenders & banks?

We Work for You. Unlike banks, we aren’t tied to a single lender. We shop all lenders to find you the best mortgage rates.

Austin Capital Mortgage	Other Lenders
Shop 100+ lenders to secure the lowest rates & closing costs	Pushes their own products only, no competitive shopping
In-house underwriting → faster decisions, fewer delays	Outsourced underwriting → slower, back-and-forth
100% online, secure uploads	Partly online, often require office visits
Dedicated loan officer, direct line, proactive updates	Call centers, long wait times, no personal contact

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We ensure that you get the best deal possible on your mortgage, making home ownership more affordable and accessible for you.

Tailored Home Loan Options for the Self Employed

Let's find the mortgage that will best suit your financial situation.

It depends on your credit, the amount you have saved for a down payment and where you’re hoping to purchase a home.

FHA Home Loan for the Self Employed

Who is it for? First-time homebuyers and self-employed individuals with less-than-perfect credit or non-traditional income.

Credit Score Requirement

3.5% down payment: 580 or higher
10% down payment: 500-579

Down Payment Requirement

As low as 3.5%.
Pros: Lower down payment requirements, more lenient credit and income requirements.
Cons: Mortgage insurance premiums (MIP) required, loan limits apply.

Conventional Home Loan for the Self Employed

Who is it for? Self-employed individuals with strong credit and financial history.

Credit Score Requirement

Typically 620 or higher.

Down Payment Requirement

Usually 3% to 20% of the purchase price.
Pros: Competitive interest rates, flexibility in loan terms.
Cons: Strict documentation requirements, higher credit score needed.

Bank Statement Loan for the Self Employed

Who is it for? Self-employed borrowers looking for an alternative income verification.

Credit Score Requirement

Varies by lender, but typically 620 or higher.

Down Payment Requirement

Varies by lender.
Pros: Uses bank statements for income verification, helpful for self-employed with fluctuating income.
Cons: Higher interest rates, may require larger down payment.

Non QM Loans for Self Employed Borrowers

Who is it for? Borrowers who don't meet traditional mortgage standards, including self-employed individuals with complex income.

Credit Score Requirement

Varies widely among lenders, but 620 or higher is common.

Down Payment Requirement

Varies by lender.
Pros: Flexible eligibility criteria, considers non-traditional income.
Cons: Higher interest rates, shorter loan terms.

VA Home Loan for the Self Employed

Who is it for? Eligible veterans and active-duty service members, including self-employed individuals.

Credit Score Requirement

No set minimum, but most lenders prefer 620 or higher.

Down Payment Requirement

No down payment required for most borrowers.
Pros: No down payment required, competitive interest rates.
Cons: Limited to eligible veterans and active-duty service members, VA funding fee.

USDA Home Loan

Who is it for? Eligible rural borrowers, including some self-employed individuals.

Credit Score Requirement

Typically 640 or higher.

Down Payment Requirement

No down payment required.
Pros: No down payment required, low-interest rates.
Cons: Limited to eligible rural borrowers, income limits apply.

Did you know? Austin Capital Mortgage has been on Texas' Top Mortgage Lenders list by the Austin Business Journal every year since 1996.

1. Gift money can be use as downpayment.

2. Low credit score requirements.

3. Downpayment as low as 3.5%.

4. Up to 43% DTI Ratio & co-signers allowed.

The maximum FHA loan limit in a high-cost county has increased to $1,149,825 in 2024. Read full FHA loan eligibility criteria for 2024 here.