New to Real Estate · Nashville, TN · Member since 2022 · 2 posts · 1 vote
I have a friend who has been self-employed for about 6-months. He's doing great & just hired another employee. His understanding is that he is unable to qualify for a mortgage until he has been in business for two years. He's got a down payment & looking to buy his first home in the mid-term future. Does he have other financing options to secure a mortgage prior to this 2-year mark?
I have a friend who has been self-employed for about 6-months. He's doing great & just hired another employee. His understanding is that he is unable to qualify for a mortgage until he has been in business for two years. He's got a down payment & looking to buy his first home in the mid-term future. Does he have other financing options to secure a mortgage prior to this 2-year mark?
Like others have said, conventional requires 2 year history. DSCR won't work because it's owner occupied. He could do a bank statement loan program after 12 months!
I had the same problem with my self employment income with any Freddie/Fannie loan. I suppose if he is able to secure a loan from an unconventional lender he might be able to. I wonder if he finds a place that can show to be cash flow positive, gets a DSCR loan with an adult assigned as the rentor, he might be able to get the loan. Then after seasoning of 18 months (to equal 2 years of self employment income), he might be able to refinance the whole thing, pay off the DSCR loan and have a conventional mortgage. Just an idea but I don't know if it would work.
Hi! There are a few options here. If their new self employed position is in the same line of work as what they were previously doing it can be worked around. There are also some non conforming products that allow for work arounds. He should reach out to some lenders with his specifics and see what will work for him. Best of luck!
I have a friend who has been self-employed for about 6-months. He's doing great & just hired another employee. His understanding is that he is unable to qualify for a mortgage until he has been in business for two years. He's got a down payment & looking to buy his first home in the mid-term future. Does he have other financing options to secure a mortgage prior to this 2-year mark?
Yes, to qualify for an owner occupied first home, he will have to be in business for 2 years. DSCR is not an option because, I'm assuming, this is his first home and he wants to live in it.
I have a friend who has been self-employed for about 6-months. He's doing great & just hired another employee. His understanding is that he is unable to qualify for a mortgage until he has been in business for two years. He's got a down payment & looking to buy his first home in the mid-term future. Does he have other financing options to secure a mortgage prior to this 2-year mark?
Like others have said, conventional requires 2 year history. DSCR won't work because it's owner occupied. He could do a bank statement loan program after 12 months!
Thanks, all, for the thoughtful responses. I'll share this information with him and encourage him to reach out to some local lenders/his business bank to get more clarity on his specific situation.