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This was beneficial, particularly for people who owned businesses that weren’t profitable in their early days.

Previously, an entrepreneur could qualify for a loan by providing one year of tax returns for income verification. The difference lies in the documentation required the self-employed must provide more. Lenders are cognizant of the need for new risk assessment models and are working to meet this demand.Īs of now, a self-employed person qualifies for a mortgage the same way as a traditional worker: through down payment, credit history, and debt-to-income ratio. This doesn’t mean it’s impossible, however. If you own your own business, mortgage loan constraints can be an issue banks balk at lending to those they deem high risk. This amounts to approximately 146 million workers. According to the Pew Research Center, self-employed people represent 10 percent of the nation’s workforce. Self-employment is fickle nationwide – the trend goes up and down - but it’s consistently very ubiquitous. This is because Freddie Mac recently tightened their guidelines for entrepreneurs. However, if you’re self-employed, securing a loan just became a little more difficult. Owning a home is part of the American dream, something that should be accessible to all.