Self-Employed Mortgages in Nevada

Traditional loans (FHA/Conventional): Typically require 2 full years of self-employment history in the same line of work. Lenders will average your income from 2 years of tax returns.

Bank statement loans: Some lenders accept 12 months of self-employment history if you have strong cash flow and 12-24 months of bank statements.

CPA P&L programs: May work with 1 year of tax returns plus a current year P&L statement if your business is performing well.

Exception: If you were employed in the same field as a W2 employee before becoming self-employed (e.g., you were a W2 realtor then went independent), lenders may consider your total experience and potentially reduce the self-employment requirement to 1 year.

Yes, but understand the trade-off: More write-offs = lower qualifying income for traditional mortgages.

Example: If your gross business revenue is $180,000 but after legitimate expenses and write-offs you net $85,000 on your tax return, lenders will use the $85,000 (or an average of 2 years) as your qualifying income.

Solution: Consider a bank statement loan that uses your gross deposits (before write-offs) to calculate income. This captures your true cash flow and can result in much higher qualifying income.

Strategy: If you're planning to buy a home in 1-2 years, consider minimizing write-offs on those tax years to show higher net income. Consult your CPA about the best approach for your situation.

Credit score requirements vary by loan type:

• FHA loans: 580 minimum (3.5% down), 620+ recommended
• Conventional loans: 620 minimum, 680+ for better rates
• Bank statement loans: 660-680 minimum typically, 700+ ideal
• Jumbo/Portfolio loans: 700-720+ typically required

Important: Self-employed borrowers often face slightly higher credit score expectations than W2 employees because lenders view self-employment income as higher risk. Having a 680+ credit score significantly improves your approval odds and rate options.

LLC (Single Member/Partnership): Lenders use your Schedule K-1 (your share of business income) plus your W2 salary from the LLC if applicable. They'll add back non-cash expenses like depreciation and depletion.

S-Corporation: Income calculation includes your W2 salary from the S-Corp plus your K-1 distributions. Lenders will average the past 2 years and may add back depreciation, amortization, and one-time expenses.

C-Corporation (25%+ ownership): More complex. Lenders typically use your W2 salary plus distributions/dividends, analyzed through business tax returns (1120). If you own 25%+ of the company, you're considered self-employed.

Key Point: Lenders will require your personal tax returns (1040s) AND your business tax returns (1065, 1120, 1120S) to trace the income flow. They want to see the business is profitable and your income is stable or growing.

Income fluctuation is common for self-employed individuals (seasonal businesses, project-based work, commission sales, etc.). Lenders understand this and have ways to handle it:

Bank statement loans: Average your deposits over 12-24 months to smooth out the fluctuations. A few low months won't hurt if your overall average is strong.

Tax return analysis: Lenders average 2 years of income, which naturally accounts for annual fluctuations. If Year 1 was $90k and Year 2 was $110k, they use ~$100k average.

Letter of explanation: If fluctuations are seasonal (e.g., construction slow in winter, busy in summer), explain this pattern and show the annual totals are consistent. Provide contracts or proof of recurring work.

Tip: Having 6+ months of reserves in savings helps compensate for income variability in the lender's eyes. It shows you can handle lean months.

Yes! Lenders can combine income from multiple sources as long as each is documented and verifiable:

W2 + self-employment: If you have a part-time W2 job ($30k/year) plus self-employment ($50k/year), lenders will add both for a total of $80k qualifying income. You'll need to provide W2 paystubs AND self-employment documentation.

Multiple 1099 clients: Completely fine. Provide all 1099 forms and show consistency over 2 years. Lenders may average or use the lower year to be conservative.

Rental income + self-employment: If you own rental properties, that income can be added (typically 75% of gross rents minus mortgage/expenses). Provide Schedule E from tax returns.

Requirement: Each income stream must have a 2-year history (or meet exceptions for newer income). Lenders won't count income you just started receiving unless it's W2 salary from a new job.

It depends on the loan program:

Traditional FHA/Conventional loans: Rates are the same as W2 borrowers if you meet standard guidelines (2 years tax returns, good credit, stable income). Your employment type doesn't affect the rate—only your credit score, down payment, and DTI matter.

Bank statement loans: Typically have rates 0.25% to 1% higher than conventional loans because they're considered non-QM (non-qualified mortgage) products. However, the trade-off is easier qualification without tax returns.

Portfolio/Non-QM loans: Interest rates can be 0.5% to 1.5%+ higher, depending on risk factors. Larger down payments (20-25%) often result in better rates.

Bottom line: If you qualify for a traditional FHA or conventional loan with 2 years of tax returns, you'll get standard market rates regardless of being self-employed. Alternative documentation loans (bank statements, P&L) come with slightly higher rates in exchange for easier approval.

Yes, if it's on your personal credit report. Business credit cards, lines of credit, or loans that appear on your personal credit (most small business debt does) will count toward your debt-to-income ratio.

Example: If you have a business line of credit with a $15,000 balance and $300/month minimum payment, that $300 reduces your mortgage qualification. Paying it off could increase your home buying budget by $70,000-$90,000.

Strategy: Focus on paying down revolving debt (credit cards, lines of credit) as these have the biggest DTI impact per dollar. Installment loans (business vehicle, equipment financing) have fixed terms so their impact is more predictable.

Exception: If the business debt is solely in the business name (true corporate credit not tied to your SSN), it may not count. However, most small business owners personally guarantee business debt, so it shows up. Check your credit report to be sure.