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Can I get an FHA Home Loan if I’m Self Employed?

Can I get an FHA Loan?

Being self employed is not a deal breaker if you are trying to get an FHA Loan. Although it can be more difficult to get approved especially if your business is in the initial start up stage - but it can be done.

One important aspect is to begin keeping good business records if you do not already do this, so that you can prove to your lender that your business is lucrative and provides the income you need to pay your bills on time. If you can’t prove on paper that you have a steady income , FHA can’t conclude that you are a good risk.

Your FHA loan application will require information on the nature of your business, and also what your net income is compared to your business expenses. Self-employed people are often asked to provide a profit-loss statement, which helps the FHA and your lender understand how successful your business is. So make sure you keep detailed records of legitimate business expenses and have your taxes professionally prepared. This will help FHA have confidence in who they are lending to.

If you are considering buying a home, begin to prepare as much as a year in advance, especially if there are issues with credit repair or disputes on credit reports to deal with. If you are self employed you should be able to show a stream of reliable income for two years and have a set of accurate records to back up the information you put on the FHA loan application.

You will also need to be able to answer questions related to periods of inactivity and how this might affect your ability to make your FHA mortgage payments.

So if you keep good business records and can prove your business is working and providing the income you need to obtain your loan you should have success in getting an FHA home loan.