SELF-EMPLOYED BORROWERS

What is considered self-employed?

  • an individual who has a 25% or greater ownership interest in a business

Requirements:

  • two-year history

  • can have less than two years as long as your most recent tax returns reflect the receipt of such income as the same (or greater) level in a field that provides the same products or services as the current business or in an occupation in which your had similar responsibilities to those undertaken in connection with the current business

Verification of Income:

  • Past two years' tax returns

  • can use IRS transcripts

  • One year tax return can be used if you've been self-employed for over five years

  • Income Fluctuation:

    • if the income has significantly increased or decreased, you must provide justification to support the determination that the income used to qualify you is stable and likely to continue for the next three years​

    • may need to obtain additional years' tax returns when your income fluctuates in order to determine the stability of your income

IRS Payment Plans:

  • used in the debt ratio

  • a tax lien can not have been filed

  • need approved installment agreement with terms of repayment, including the monthly payment and total amount due

  • evidence that you are current on the payments:

    • most recent payment reminder from the IRS​

    • bank statements showing proof of withdrawal

    • at least one payment needs to be made prior to closing

Electronic Federal Tax Payment System:

  • make your tax payments throughout the year

  • can schedule payments up to 365 days in advance

  • pay your income, employment, estimated and excise federal tax payments

  • view 15 months of payment history

  • Enroll Here​​

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