Self-Employed Mortgage Guide

Self-Employed Mortgagesin Nevada

Complete guide for 1099 contractors, business owners, and freelancers to qualify for Nevada home loans with alternative documentation options

12-24mo
Tax Returns Needed
620+
Minimum Credit Score
43%
Max DTI Ratio

Why Self-Employed Mortgages Are Different

Traditional W-2 employees show 2 pay stubs and get approved. Self-employed borrowers face extra scrutiny because lenders must verify income stability when you control the numbers. Nevada has 380,000+ self-employed residents – you're not alone in this challenge.

Traditional Employment

  • 2 pay stubs required
  • W-2 verification
  • Simple income calculation
  • Fast approval (days)

Self-Employed

  • 2 years tax returns required
  • 1099s and business returns
  • Complex calculations (add-backs)
  • Longer underwriting (weeks)

Self-Employed Loan Options in Nevada

Full Documentation Conventional/FHA/VA

Traditional underwriting with complete tax returns and business documentation

Requirements

  • 2 years personal tax returns (1040 with all schedules)
  • 2 years business returns (1120/1120S/1065 if incorporated)
  • Year-to-date profit & loss statement
  • CPA-prepared financials (preferred)
  • 2 months business bank statements

Income Calculation Method

Underwriters average 2 years net income after adding back:

  • Depreciation expenses
  • Business mileage/vehicle deduction
  • Home office deduction
  • Depletion/amortization
  • Non-recurring income removed

Best For: Established Nevada businesses (2+ years history), those with clean tax returns showing stable income. Offers best rates. Down payment: 3.5% FHA, 0% VA, 3-5% Conventional.

Bank Statement Loan Programs

Qualify using 12-24 months business/personal bank statements instead of tax returns

Requirements

  • 12 or 24 months bank statements (business or personal)
  • Credit score 620-680+ depending on program
  • Down payment: 10-20% typically
  • Proof of business existence (license, articles)
  • Reserves: 6-12 months recommended

Income Calculation Method

Lender analyzes deposits, averaging monthly income. Calculates using:

  • 50% factor: Average deposits × 50% = income (conservative)
  • 75% factor: If well-documented expenses shown
  • Business deposits minus transfers/returns

Example: $20K monthly deposits × 50% = $10K qualifying income

Best For: Nevada self-employed with high write-offs (low taxable income but strong cash flow), newer businesses (1-2 years), 1099 contractors. Rates slightly higher than conventional but flexible approval.

Asset-Based / Asset Depletion Loans

Use investment accounts, retirement funds, or liquid assets to qualify without income documentation

Requirements

  • Substantial liquid assets ($500K+ often required)
  • 2 months statements for all accounts
  • Credit score 680+
  • Down payment: 20-30%
  • Assets remain yours (not liquidated)

Income Calculation Method

Lender divides total assets by loan term to create income:

  • Formula: (Total Assets - Down Payment) ÷ (Loan Term × 12)

Example: $1M assets, $400K home, 30-year loan
($1M - $120K down) ÷ 360 months = $2,444/mo qualifying income

Best For: Nevada retirees with assets, high-net-worth individuals, recent business sales (1099 from equity sale). Best for Lake Tahoe/high-end Nevada properties where borrower has wealth but irregular income.

1099-Only / Wage Earner Program

For W-2 + 1099 hybrid workers or pure 1099 contractors with consistent client history

Requirements

  • 1-2 years 1099 history with same client(s)
  • CPA letter or tax transcripts
  • Letter from client confirming ongoing work
  • Credit score 620+
  • Down payment: 5-10%

Income Calculation Method

Uses gross 1099 income with minimal expense deductions:

  • Average last 2 years 1099 income
  • Deduct only direct expenses (varies by lender)
  • Some lenders use 90% of gross 1099

Much simpler than full self-employed calculation

Best For: Nevada tech contractors, gig economy workers (Uber/Lyft full-time), consultants, freelancers with major clients. Common in Las Vegas entertainment/hospitality 1099 workers.