Getting a Self Employed Mortgage in Florida: Loan Options and Paperwork

Getting a self employed mortgage in Florida is very doable, but the path looks different from a W-2 loan. Lenders cannot call your employer to confirm your pay, so they lean on tax returns, bank deposits and business records instead. Palm Beach County has many business owners, contractors and freelancers, and most of them qualify in one of two ways. This guide explains both, the paperwork each one needs, and the trade-offs on down payment and rate.

Key takeaways

• Under Fannie Mae rules, you count as self-employed if you own 25% or more of a business.
• Conventional loans usually want two years of self-employment history, shown on signed tax returns or IRS transcripts. One year can work in some cases.
• Bank statement loans are non-QM loans that use 12 or 24 months of deposits in place of tax returns.
• Non-QM loans give you more room on paperwork, but they tend to cost more and often need a larger down payment.
• All lenders must make a good-faith check that you can repay. The difference is in how they document it.

Who counts as self-employed for a mortgage?

Fannie Mae's Selling Guide sets a clear line. Anyone with a 25% or greater ownership stake in a business is treated as self-employed. That includes sole owners, partners, and many owners of LLCs and S corporations.

It also covers most 1099 workers. Real estate agents, rideshare drivers, consultants, trades people and gig workers usually fall in this group. If your income shows up on Schedule C, Schedule E, a K-1 or a business return, expect the lender to treat you as self-employed.

This matters because the lender will judge your income from what your business earns after expenses. In other words, the number on your tax return counts, not the gross sales you bring in.

Option one: a conventional self employed mortgage

Many business owners qualify for a standard conventional, FHA or VA loan. These are often the lowest-cost options, so start here if your tax returns show enough income.

How much history you need

Fannie Mae generally wants a two-year history of self-employment income. A shorter history can work in some cases. Your most recent signed personal and business tax returns must show a full 12 months of income from the current business. You also need proof that you earned as much or more in the same field, or in a similar role, before you started the business.

The paperwork for a conventional self employed mortgage

Expect the lender to ask for signed federal tax returns for the past two years, with all schedules. In place of copies, the lender may use IRS-issued transcripts of your personal and business returns. In addition, some lenders ask for a year-to-date profit and loss statement and recent business bank statements.

There is one shortcut. If your business has existed for five years in a row and you have owned at least 25% of it that whole time, the lender may accept one year of returns. It must also complete Fannie Mae's cash flow analysis, Form 1084.

The write-off problem

Here is the catch most owners run into. Smart tax planning lowers your taxable income. But a lower taxable income also lowers what a conventional lender can count. So a business that clears plenty of cash can still look thin on paper.

If you plan to buy within a year or two, talk with your CPA and a loan officer together. In some cases, taking fewer deductions for a year can make a big difference on the loan. That choice has its own tax cost, so run the numbers both ways.

Option two: a non-QM self employed mortgage

When tax returns do not show your real cash flow, a non-QM loan may fill the gap. To see why these loans exist, start with the federal rules.

The Consumer Financial Protection Bureau's ability-to-repay rule says a lender must make a good-faith effort to confirm you can repay. A qualified mortgage, or QM, is a loan that meets set standards. QMs cannot have interest-only periods, negative amortization, balloon payments or terms over 30 years, and they cap some up-front points and fees.

A non-QM loan still has to meet the ability-to-repay rule. However, it is not held to the QM checklist, so the lender can verify income in other ways. That is the space where bank statement loans live.

Bank statement loans

A bank statement loan uses 12 or 24 months of deposits from your personal or business account in place of tax returns. The lender adds up deposits, then applies an expense factor to business accounts to estimate your true income. A CPA letter can sometimes support a lower expense factor.

Terms vary by lender. As one example, NASB's published bank statement program lists a 10% minimum down payment, a 700 minimum credit score, a 50% maximum debt-to-income ratio, and loan amounts from $200,000 to $1,250,000. Other lenders set different limits, so shop around.

Other non-QM options

Bank statement loans are the most common choice for self-employed buyers, but there are others. Some lenders qualify you from a CPA-prepared profit and loss statement. Others look at your liquid assets and turn them into a monthly income figure. Investors buying a rental may look at loans based on the property's rent instead of personal income.

Down payment and rate trade-offs

The main cost of a non-QM self employed mortgage is price. NASB, for example, says its bank statement loans carry higher rates than conventional mortgages. Many non-QM lenders also want more money down and more cash in reserve after closing.

Think of it this way. A conventional loan rewards clean, high taxable income with lower costs. A non-QM loan rewards strong deposits and savings with more room on paperwork. Some buyers start with a non-QM loan, then refinance into a conventional loan once two years of higher tax returns are on file. That plan only works if rates and home values cooperate, so do not count on it.

Mortgage insurance is another piece. On a conventional loan with less than 20% down, you will usually pay private mortgage insurance. Our guide to PMI in Florida explains how it works and when it ends.

How to prepare for a self employed mortgage

A little planning can save you money and stress. Start these steps three to six months before you shop.

1. Pull your last two years of tax returns and check the net income on each schedule.
2. Keep business and personal money in separate accounts.
3. Avoid large cash deposits you cannot explain with a paper trail.
4. Pay down revolving debt to improve your debt-to-income ratio.
5. Keep your credit clean, and do not open new accounts before closing.
6. Build reserves. Lenders like to see several months of payments in the bank.
7. Get pre-approved by a lender who regularly works with self-employed buyers.

Why pre-approval matters in this market

In August 2026, Palm Beach County single-family homes went under contract in a median of 40 days, with a $650,000 median price and 3.5 months of supply, according to Miami Realtors. In a market that tight, sellers want proof your loan will close. A full pre-approval, with income already reviewed, makes your offer stronger than a quick pre-qualification.

Many self-employed buyers shop in places like Boca Raton and Jupiter, where business owners make up a big part of the buyer pool. A local agent can tell you which sellers and listing agents are comfortable with non-QM financing.

Common mistakes that slow down a self-employed loan

Most delays on self-employed files come from a short list of problems. The good news is that you can fix nearly all of them before you apply.

• Mixing accounts. When business and personal money share one account, the lender has a hard time telling income from transfers. As a result, it may count less of your deposits.
• Unfiled or late returns. If last year's return is on extension, ask the lender how that affects your file. Some loans need the most recent year on record.
• Falling income. When this year's income runs below last year's, many lenders use the lower figure or ask for an explanation. A letter from your CPA can help.
• New debt during the process. A new truck lease or equipment loan can change your ratios days before closing. Wait until after you get the keys.
• Missing business proof. Keep your business license, state filings and a CPA contact handy, since many lenders ask for proof that the business is active.

Above all, be open with your loan officer early. Surprises late in the file are what cause missed closing dates.

Frequently asked questions

Can I get a mortgage with only one year of self-employment?

Sometimes. Fannie Mae allows it when your latest tax returns show a full 12 months of income from the business and you earned as much or more in the same or a similar line of work before. Many non-QM lenders also accept shorter histories.

What is a bank statement loan?

It is a non-QM loan that uses 12 or 24 months of bank deposits to figure your income instead of tax returns. The lender applies an expense factor to business deposits. Rates are usually higher than on conventional loans.

How much do I need to put down on a self employed mortgage?

It depends on the loan. Conventional loans can allow low down payments if your returns qualify. Non-QM loans often need more. One published bank statement program, for example, starts at 10% down.

Do lenders use my gross income or my net income?

Conventional lenders use your income after business expenses, as shown on your tax returns. Bank statement lenders start from deposits and then subtract an expense factor.

Can a 1099 contractor get a conventional loan?

Yes. Lenders usually treat 1099 income like self-employment income. Expect to show two years of tax returns, or a shorter history that meets the lender's rules.

Sources

• Fannie Mae Selling Guide, B3-3.2-01 self-employed borrower
• CFPB, What is a Qualified Mortgage?
• NASB, bank statement loan program
• Miami Realtors, Palm Beach County August 2026 market report

This article is general information, not legal, tax or financial advice. Loan programs and rules change, so talk with a licensed lender and a tax professional about your own situation.

Selling one home to buy the next? Your equity can make any loan easier to get. Start with a free home valuation. Buyers can schedule a buyer strategy call, and we will help you line up a lender who knows self-employed files before you tour. Talk with our team.