Recent changes by Fannie Mae are great news for Austin self-employed mortgage borrowers.

Previously to qualify for a Fannie Mae mortgage self-employed borrowers were required to provide the most recent 2 years tax returns to document their income.

A recent change allows mortgage companies to use only the most recent year’s tax return to qualify a buyer for a Fannie Mae mortgage.

This will be especially helpful for 2 types of borrowers

  • Self employed borrowers who started their business 2 years ago and had large start up expenses. When a borrower takes business tax deductions it likely will reduce their net income which is the figure mortgage companies use to establish how much debt a borrower can have.

    If this person had a low-income figure 2 years ago but in year 2 had a higher net income due to not having those start up expenses mortgage companies may now only consider the income figure from year 2.
  • Self employed borrowers who have seen their business grow from 2 years ago to the past year. In many cases it takes time for a successful business to get off the ground. Self-employed borrowers may have seen their net income grow in the second year of business. This new underwriting rule may allow only the 2nd year’s tax return that more accurately reflects the net income for the self-employed borrower to be used when establishing an income figure.

If you have any questions about qualifying for a mortgage as a self employed borrower please call/text me at 512-791-7473 or email at and we will put you in touch with a mortgage lender who will be able to help answer any of your questions.

***Fannie Mae loan limits in the Austin, TX area are currently $417,000.***

Posted by Eric Peterson on
Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.