FHA Loan in California For Self-Employed Borrowers

FHA Loan in California For Self-Employed Borrowers

Introduction Getting an FHA loan while self-employed is possible. While there are additional standards to pass compared to what the average employee faces, FHA loans are available to business owners as well. Here you’ll find out how you can prepare for your FHA loan application as a self-employed individual.

Can you get an FHA loan while self-employed? You can qualify for a Federal Housing Administration (FHA) loan while self-employed, and you can also qualify for a mortgage in general. The standards might be more challenging for self-employed people due to the dynamics of running your own business, but overall, working for yourself doesn’t have to hinder you from getting a mortgage.

Proof Of Business When you apply for an FHA loan in California, your lender must verify that your business has been operational for at least 2 years. Your business must fall into one of the following categories: sole proprietorship, limited liability corporation, partnership, or corporation. Also, every lender has different stipulations to prove that you’re running a bona fide business.

Other Documentation Requirements Self-employed individuals must also provide supporting documentation to qualify for an FHA loan in California. Typically, your lender will request the last two years of tax returns, this year’s profit and loss (P&L) statements, and personal bank statements.

Tips For Getting An FHA Loan While Self-employed When gathering documentation to apply for an FHA loan, follow the steps below: • Review your credit score and history • Save for a higher down payment • Lower your debt-to-income (DTI) ratio • Assemble proof of your self-employment history • Shop around

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