Self-Employed Borrowers Need 2 Years?

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Generally, self employed borrowers need 2 years self employment to meet home loan rules.  However, pretend you are superman and mortgage rules are steel.   Let’s see how they bend!

The challenge facing many self employed borrowers is the 2 year self employment history requirement.  While the 2 year rule is typically the standard, exceptions to it exist for self employed borrowers.

Why is There a 2 Year Self-Employment Rule?

The two-year rule for the self employed is fair in most cases.   First, a 2 year history is a decent chunk of time.   In that 24 month period self employed borrowers performance indicates their longer term success.  Alternatively, a self employed borrower running the show for 2 months would not be enough time to make an assessment of their abilities.

Exceptions to the 2 Year Self-Employed Rule?

Many self-employed consumers leap from employee to self-employed while staying in the same industry.  When borrowers go from worker to boss and becomes categorized as self-employed in the same field they have worked in, Arizona mortgage underwriters tend to soften up.  Borrower not changing their industry yet simply go from getting a paycheck to writing the paychecks have more options.

Borrowers transitioning to self-employed within the field they already know are different.  In fact, they might qualify for a mortgage with only 1 year’s self employment experience.  However, exceptions to the standard two-year self employment rule are granted on a case by case basis.  To determine if the exception applies, your Arizona Mortgage Lender needs to submit a full loan application/file along with supporting documentation to explain why a one year exception should be granted for underwriting review and approval.

By Jeremy House



  1. My question is: I have been in the same field as a caregiver for seven years but the last three years I filed my taxes the first year and will file this year but I did not fall last year..How will this fair on the two-year rule when I apply for a mortgage next year.

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