Can I Get Approved for a Mortgage If I Am Self-Employed?

Being your own boss has perks—flexibility, independence, and the ability to call the shots. But when it comes to getting a mortgage, self-employment can feel more like a roadblock than a reward. Traditional lenders, especially big banks, often want two years of clean tax returns with consistent income. If you’ve reinvested heavily into your business (and legally written off expenses to minimize taxes), those same tax returns might make you look “unqualified” on paper—even if your bank account tells a very different story.

So, can you get approved for a mortgage if you’re self-employed? Absolutely. The path may not look the same as a W-2 borrower, but with the right loan program and the right broker, homeownership is very much within reach.

Why Traditional Lenders Struggle With Self-Employed Borrowers

Big banks like Chase spell it out clearly: if you’re self-employed, expect to hand over business tax returns, profit-and-loss statements, balance sheets, client letters, licenses, and more. That’s a mountain of paperwork, and for many entrepreneurs, it doesn’t tell the full story of their financial stability.

The problem is baked into the system. Tax returns are designed to minimize taxable income, not maximize mortgage approval odds. What looks like low income on paper could actually reflect strong cash flow, healthy reserves, and a thriving business.

Take this example: a business owner brings in $1 million in annual revenue but, after deductions, depreciation, and reinvestment, reports just $100,000 of taxable income. On paper, they look like a modest earner. In reality, they manage a seven-figure operation with substantial monthly cash flow—more than enough to support a sizable mortgage. Traditional underwriting ignores that nuance, which leaves many qualified self-employed buyers sidelined.

This is where mortgage brokers—and non-traditional programs—step in.

The Mortgage Options for Self-Employed Borrowers

There isn’t just one path to approval. Depending on your income structure, assets, and business history, you have multiple ways to qualify:

1. Bank Statement Loans (The Easiest Option)

Instead of tax returns, these loans rely on 12–24 months of business or personal bank statements. Lenders review deposits, average them, and use that figure as qualifying income. For a business owner who reinvests profits and minimizes taxable income, this program is often the simplest and most accurate reflection of real earnings.

At LendFriend, our bank statement loan is the go-to option for many entrepreneurs because it avoids the friction of explaining every line on a Schedule C. If your deposits show consistent revenue, you can qualify—even if your tax returns suggest otherwise.

2. Profit & Loss (P&L) Loans

For some borrowers, a CPA-prepared P&L statement can substitute for tax returns. Lenders will analyze revenue, expenses, and net income to create a qualifying profile. These loans are less common than bank statement programs but remain a strong alternative when your books are clean and CPA-verified. The challenge is that P&L loans often depend on how quickly and accurately your accountant can produce documentation—and whether they’re willing to revise it multiple times to match a lender’s requests. That can make the process frustrating and time‑consuming. For many borrowers, it’s easier to qualify with a program that involves an accountant as little as possible, which is why bank statement loans tend to win out.

3. Traditional Documentation (When It Works)

Of course, if you have two years of strong tax returns and W-2 income from a business you own, you may still qualify conventionally. But most self-employed borrowers don’t fall neatly into that box—which is why alternative documentation programs exist. That said, going the conventional route can feel like a massive paperwork headache—dozens of forms, tax schedules, and accountant letters—but it sometimes leads to a marginally better rate since it’s conventional instead of non-QM financing like bank statement loans.

Why Bank Statement Loans Stand Out

Among these options, bank statement mortgages are hands-down the most flexible and accessible for entrepreneurs. They reflect real cash flow, not taxable income. If your business consistently deposits $20,000 a month, that’s what underwriters care about—not whether you wrote off a $15,000 truck for tax purposes.

What makes them so powerful is how straightforward the review process can be. Instead of combing through dozens of tax schedules, underwriters simply average your deposits over the last 12–24 months. That gives a clear picture of what you really earn, month in and month out. It also captures the seasonality many businesses experience—whether you’re a wedding photographer with peak summers, a landscaper with spring surges, or a consultant who bills quarterly retainers. As long as the deposits show steady strength over time, you can qualify.

It’s also far less invasive. You don’t need to explain every line item deduction to prove your business is healthy. You don’t need to ask your accountant to re‑issue documents. Your statements speak for themselves.

It’s the program Chase and other banks don’t offer, which is why their advice rings hollow. They tell borrowers to hand over tax returns and hope for the best. At LendFriend, we know better. Self‑employed income is often lumpy, irregular, or aggressively optimized for tax purposes. Bank statement loans meet you where you are—and they’re designed to make sure your actual success, not your tax strategy, is what gets you approved.

What You’ll Still Need Regardless of What Self Employed Mortgage Program You Choose

Even with alternative documentation, underwriters will look at the big picture. That means:

• Credit score: 620 is the bare minimum. Aim for 720+ if you don’t want to hate your mortgage rate (or be forced to pay points).

• Down payment: Many lenders require at least 20%, but 15% could be an option. Bank statement and non-QM loans generally fall in the 15–20% range.

• Reserves: Expect to show a few months of mortgage payments in the bank, and if it’s a jumbo loan, be prepared for lenders to require even more reserves to prove you can comfortably handle the larger obligation.

• Business health: Consistent deposits (not just one big check) make approval easier. Lenders will also look for proof that the business has been in existence for at least two years. Exceptions are available if your company has only been operating for one year, though that usually comes with a higher rate. The good news: once your business reaches the two‑year mark, you can always refinance into a lower‑rate program.

These programs aren’t loopholes—they’re designed to give qualified borrowers fair credit, even when tax paperwork doesn’t tell the story.

Real-World Example

One of our clients ran a thriving design agency. On paper, her tax returns showed just $45,000 of taxable income after deductions. But her business checking account told a different story—consistent deposits averaging $28,000 a month. With 24 months of statements, we qualified her for a $750,000 home in Houston using a bank statement mortgage.

A big bank would have turned her away. With the right program, she was approved in weeks.

Bottom Line: Yes, You Can Get Approved

Self-employment doesn’t shut the door to homeownership. It just means you need a lender who understands how to present your finances.

• If you want the simplest path, go bank statement.

• If you have CPA-prepared books, explore P&L loans.

• If your returns are strong despite your tax planning strategy, traditional mortgages may still fit.

Big banks love to say “no” if you can’t hand them perfect tax returns. But mortgage brokers like LendFriend specialize in saying “yes” by leveraging smarter, more flexible programs and using common sense to approve high quality borrowers who don't fit the traditional mold.

Ready to buy? Schedule a call with me today or get in touch with me by completing this quick form and I'll help you qualify for the mortgage you want as a self employed business owner.