Guides
Buying a home when you are self-employed
No W2? The Earned Equity Program has published ways to show self-employed, 1099, and gig income. Here they are, in plain words.
Why self-employed buyers get stuck
A regular mortgage usually asks self-employed buyers for two full years of tax returns. Many people who run a small business, drive for an app, or get paid on a 1099 earn enough to pay for a home but cannot show it that way.
The Earned Equity Program has other ways to document that income.
Ways to show your income
A tax return
For 1099 and self-employed income, the published standards accept the prior year tax return.
A profit and loss statement (P&L)
A summary of what your business earned and spent. Business tax forms such as K1s and 1120s are also on the list.
Three months of bank statements
The statements show the money that actually comes in.
Bank statements only
There is an option based on the average of three months of eligible deposits, with an adjustment for business expenses.
The 12-month rule
The program looks for 12 months of documented income history.
If you have been self-employed for less than 12 months, you may not be eligible yet. If you recently went from a W2 job to working for yourself, tell your loan officer early.
The rest of your file
Income is only one part. The published standards also look for a 580 credit score, 12 months of housing payments you can document, and a minimum 3.5% down payment.
Exceptions exist, but they are not automatic, and nobody should promise you one.
Frequently asked questions
+Do I need a down payment?
Yes. A minimum 3.5% down payment has to be documented. If your file has no exceptions, that 3.5% is the only amount verified before closing. If there is an exception in the file, all cash to close and reserves get verified in your account, plus a letter explaining where the funds came from. Gift funds are acceptable for closing but not for reserves, and a gift of equity is not permitted.
+Do I need a credit score?
The published standard is 580 or higher, using the middle of three or the lower of two from a tri-merged bureau, with at least two tradelines showing 24 months of history. Below 580, or with no score at all, the file goes to an exception with strong compensating factors. That is a real path and people do get through it, but it is not automatic and nobody should promise you it is.
+When does my name go on the deed?
The title becomes yours when you refinance into your own loan, take over the agency's FHA loan, or pay it off. Until then the agency holds title and you hold an equitable interest in the property.
The best first step is a full review
An EEP-certified loan officer will check every program you qualify for, including a regular FHA mortgage, so you choose knowing all your options.
Want to see where you stand today? The six-question tool, Am I home ready?, does not ask for your email. It is not an approval, just a first step.
More guides
- Buying with an ITIN The Earned Equity Program accepts buyers with an ITIN. Here is what the published standards ask for, in plain words.
- Low or no credit score The published standard is a 580 score. Below that, or with no score at all, a file can still be reviewed as an exception. Here is how it works.
Get connected
Every application goes to an EEP-certified loan originator.