Can I get a mortgage with only 1 year of self-employment?
Yes if you had W-2 employment in the same industry the year prior. Some non-QM programs accept 1 year unconditionally.
Conventional, FHA, VA, and USDA loans typically require 2 years of self-employment history before counting that income. The exception: if you had W-2 employment in the same general line of work the year prior, most programs accept 1 year of self-employment as continuous income. Example: a W-2 software engineer who started a 1099 consulting practice can usually qualify after 1 year of consulting if the W-2 was in tech. Switching industries (W-2 nurse to self-employed real estate agent) usually requires the full 2 years. Non-QM programs are more flexible: a few bank-statement and 1099-only lenders accept 1 year unconditionally — they use 12 months of bank statements as the income basis without requiring prior W-2. Tradeoff: rate slightly higher than 2-year programs. If you're just starting self-employment, consider keeping a W-2 job for the first year to establish hybrid income, or saving up 12 months of clean business deposits before applying.
People also ask
What documents prove 1-year self-employment?
Personal and business tax returns for the most recent year, a CPA letter confirming continuous operation, and 12 months of business bank statements.
Does my W-2 job have to match exactly?
No, "same line of work" is interpreted reasonably. A W-2 marketing manager going to 1099 marketing consulting works. A W-2 teacher going to 1099 freelance writer might not.
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Bank Statement
Bank statement mortgages qualify self-employed borrowers using 12 or 24 months of personal or business bank deposits. No tax returns. Up to 90% LTV.
1099 Only
1099-only mortgages qualify independent contractors using their last 1 or 2 years of 1099 forms. No tax returns required. Up to 90% LTV available.
Non-QM (Non-Qualified Mortgage)
Mortgages that fall outside Qualified Mortgage rules — typically used for self-employed, foreign-national, or investor borrowers.
Qualified Mortgage (QM)
A category of mortgages meeting CFPB safety standards: limits on points/fees, no risky features, and a verified ability-to-repay analysis.