Fannie Mae and Freddie Mac consider any individual who has a 25% or greater ownership interest in a business to be "self-employed", and they require the lender to analyze the borrower's personal and (if the business is unincorporated) business tax returns in order to demonstrate the "stability and likelihood of continuance" of the borrower's income. Analyzing the income of self-employed borrowers to determine whether they would qualify for a FNMA/FHLMC loan requires time, skill, and experience on the part of the mortgage broker. For this reason, many less-experienced brokers simply steer their self-employed borrowers into higher priced reduced documentation loan programs. At Allied Home Mortgage, we have many years of experience helping self-employed borrowers qualify for both full documentation and reduced documentation loan programs, and we are always willing to expend the time and effort it takes to get each and every one of our borrowers qualified for the loan program that best suits their needs.
- Full Documentation:
- FNMA/FHLMC conforming loans. These loans usually require full documentation of the borrower's income, but offer the lowest rate.
- Alternative Documentation:
- Bank statement loans. These loans allow self-employed borrowers to document their income by providing 12 or 24 months bank statements rather than tax returns.
- Reduced Documentation:
- Stated income loans. These loans are best for borrowers that cannot (or prefer no to) provide the standard FNMA/FHLMC income documentation. Some self-employed borrowers prefer stated income loans because providing full documentation is burdensome and, in the view of some borrowers, invasive of their financial privacy. Self-employed borrowers with excellent credit (generally with a mid-FICO score of 720 and above) may qualify for a stated income, stated asset loan at the same interest rate as a full documentation conforming loan.
To qualify for these loans, borrowers must satisfy lender guidelines for income, assets, and credit.
Many other loan programs are available. For more information on loan programs for the self-employed, contact Allied Home Mortgage.
To apply for one of these loan programs, fill out our short prequalification form, or submit an online application, or call us at 503-356-2241.
Allied Home Mortgage Capital Corporation
111 SE 3rd Ave, Suite C Hillsboro, Oregon 97123 503-356-2241 |
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