If you’re self-employed and trying to grow your real estate portfolio, you already know the truth: traditional mortgages aren’t built for people like you.
Whether you’re a full-time investor, run your business through an LLC, or rely on short-term rental income, conventional lenders often disqualify you based on low reported income—even if you cash flow strong.
The good news? There’s a growing world of non-QM mortgage products designed for self-employed real estate investors like you.
This guide breaks down exactly how to get approved as a self-employed borrower, which loan types work best, and how to set yourself up for long-term financing success—no tax returns or W-2s required.
Why Self-Employed Investors Get Denied by Traditional Lenders
The problem isn’t your income—it’s how you report it.
As a self-employed investor, you likely:
- Write off expenses to reduce taxable income
- Operate under an LLC or S-Corp
- Don’t have a W-2 or consistent paycheck
- Manage fluctuating rental or business income
Traditional mortgage underwriting is based on:
- Debt-to-income ratio (DTI)
- Two years of tax returns
- Stable W-2 or salaried income
So even if you make six figures and manage cash-flowing properties, your adjusted gross income (AGI) might be too low on paper to qualify.
Loan Options for Self-Employed Real Estate Investors
Fortunately, non-QM lenders now offer creative financing tailored to the realities of self-employed borrowers.
Here are your best options:
🔹 1. DSCR Loans (Debt Service Coverage Ratio)
Best for: Rental property investors using property income to qualify
- No W-2s or tax returns
- Approval based on property’s cash flow (DSCR ≥ 1.20)
- Entity ownership allowed (LLC, LP, etc.)
- Works great for BRRRR or long-term holds
📌 Ideal for self-employed landlords who want scalable financing.
🔹 2. Bank Statement Loans
Best for: Entrepreneurs and self-employed borrowers with strong deposits
- Use 12–24 months of business or personal bank statements
- No tax returns needed
- Qualifies you based on average monthly deposits
- Often used for primary, second homes, or investor properties
📌 Perfect for those with high gross income but low reported income.
🔹 3. Asset-Based Loans
Best for: High-net-worth individuals with liquid or investment assets
- Qualify based on assets (stocks, cash, retirement)
- No income verification
- Available for investment and luxury properties
- Great for early retirees or FIRE investors
📌 You don’t need income—just enough assets to cover the loan term.
🔹 4. No-Doc / Limited-Doc Investment Loans
Best for: Fast closings and low-paperwork deals
- No personal income docs required
- Approval based on LTV, credit score, and property value
- Higher interest rates, but fast to close
- Often used for fix and flips or bridge-to-rent deals
📌 Helpful when speed matters more than paperwork.
How to Prepare for a Self-Employed Mortgage
Whether you’re applying for a DSCR loan or a bank statement loan, here’s how to get mortgage-ready as a self-employed investor:
✅ 1. Organize Your LLC or Business Entity
- Operating agreement
- EIN letter from the IRS
- Articles of incorporation
- Business license (if applicable)
✅ 2. Gather Financial Docs
Depending on the loan type, you may need:
- 12–24 months of business/personal bank statements
- Proof of rent (leases, Airbnb reports, 1007 rent schedule)
- Asset statements (for asset-based loans)
- Appraisal and insurance estimates
✅ 3. Keep Credit Clean
Most self-employed investor loans require:
- 660+ minimum credit score
- No recent bankruptcies, foreclosures, or major delinquencies
- Low personal debt (even if income isn’t counted)
✅ 4. Have Reserves Ready
Lenders may ask for 3–12 months of PITIA reserves (Principal, Interest, Taxes, Insurance, Association fees), especially for investment loans.
Real-World Example
Investor: Tasha runs an STR business through an LLC and writes off travel, cleaning, and marketing. Her AGI is only $42,000—but her Airbnb income averages $12K/month.
Challenge: She can’t qualify for a conventional loan to expand her portfolio.
Solution: She uses a DSCR loan to buy a new STR based on $10,800/month in market rent.
- No tax returns required
- 75% LTV, 30-year fixed loan
- Property cash flows from day one
Self-Employed Mortgage FAQs
Q: Can I get a mortgage if I only have 1 year of self-employment?
A: Yes—especially with bank statement or DSCR loans. Some programs only require 12 months of deposit history or rent performance.
Q: Can I buy in an LLC?
A: Yes. DSCR loans and many non-QM options allow business entities to hold title and borrow.
Q: Can I do a cash-out refinance?
A: Absolutely. Many self-employed investors use DSCR or bank statement loans to pull equity from rentals and scale faster.
Final Thoughts
If you’re self-employed, you don’t need to settle for rejection letters or force yourself into traditional underwriting boxes.
Thanks to investor-friendly mortgage options like DSCR loans, bank statement loans, and asset-based financing, you can qualify based on what really matters: your income, your equity, and your strategy.
With the right lender and structure, you can keep growing—even without W-2s, tax returns, or DTI.
