Yes. Self-employed Michigan borrowers may qualify using documented income that meets the selected loan’s requirements. Mike’s minimum credit score is 580; program-specific requirements and full underwriting still apply.
You know your business. Mortgage lenders need to understand it, too. Tell me what you’re trying to buy or refinance, and I’ll help you compare the documentation, payment and upfront costs that may fit your situation.
No. Deposits can include transfers, borrowed funds and business revenue before expenses. A lender reviews the documentation required by the chosen program and whether income is stable and available to you. I would compare eligible tax-return and alternative-documentation paths before deciding that a non-QM loan is necessary.
Fannie Mae: self-employed income review · About Mike Alkema
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Updated October 7, 2026. Educational information; borrower, property and lender review determines eligibility.
There is no universal “self-employed loan.” There are several possible documentation approaches, and each one has different pricing, credit, asset and property requirements.
| Documentation path | How the income is reviewed |
|---|---|
| Conventional tax-return analysis | When tax returns support sufficient stable income, conventional financing may provide attractive terms and familiar underwriting. |
| Bank statement programs | Eligible personal or business deposits may be analyzed over a required period, with an applicable expense factor used to estimate qualifying income. |
| 1099 documentation | Some programs may use eligible 1099 income with program-specific calculations rather than a traditional full business tax-return analysis. |
| P&L or alternative documentation | Certain non-QM programs may consider eligible profit-and-loss statements, asset utilization or other alternative documentation. |
Compare payment, cash to close and any required reserves alongside the income calculation. Gross deposits are not automatically qualifying income.
Keep the business-income review and the household budget together. Start these steps before choosing a property so there is time to resolve documentation questions.
Continue with 12- and 24-month bank-statement options, tax planning after a Michigan purchase and a Loan Estimate comparison. Send financial records only through an approved secure channel.
For the agency approach, see Fannie Mae’s self-employed borrower documentation guidance. The selected lender determines the documents and calculations required for your file.
Imagine a sole proprietor with $180,000 annual revenue and $105,000 in business expenses. The $75,000 difference is $6,250 a month before any mortgage-specific adjustments. It would be misleading to qualify that person on $15,000 monthly gross receipts. The lender reviews returns, permitted adjustments, income trends, debts and business continuity; a declining trend can change the result.
Start with filed personal and applicable business returns, ownership information, recent business statements and current profit-and-loss records. Fannie Mae’s guidance generally calls for a two-year earnings history, with exceptions subject to documented conditions. A shorter history needs an individual review, not a blanket promise.
For alternative documentation, ask how eligible deposits and business expenses are analyzed. Internal transfers and one-time deposits are not automatically income. Compare pricing, cash required, reserves and payment against a traditional tax-return option.
Connect the income review to your comfortable housing budget and the Grand Rapids property you are considering. Share documents only through an approved secure channel.
Buying or refinancing? Share your rough timing and the type of business you run. A general overview is enough to begin.
Want to understand the numbers behind your options? Read how Schedule C income is reviewed, when depreciation can be added back, and how bank-statement and tax-return mortgages compare.
We’ll discuss whether tax returns, eligible bank statements or another available documentation method may fit—and what each could cost.
If you want to move forward, I’ll explain which documents are needed and how to provide them through an approved secure channel.
Tell Mike what you’re trying to do →
Please do not send tax returns, bank statements or account numbers through the question form, text or ordinary email.
Self-employed borrowers frequently run healthy businesses and still receive a disappointing mortgage answer. The reason is simple: business cash flow, taxable income and qualifying mortgage income are not the same thing.
A conventional underwriter may calculate income from tax returns after considering business expenses, ownership percentage, distributions, liquidity and trends. A non-QM lender may use an entirely different documentation method. The right first step is figuring out which income story your documents can support.
Business owners are supposed to track legitimate expenses. The tax code and mortgage underwriting, however, have different goals. A business owner can have strong cash flow while showing less taxable income after deductions.
That does not mean the lender can simply ignore the tax return or add back every expense. Conventional guidelines identify which items may be considered and how business stability is evaluated. This is why a quick online calculator is rarely enough for a complicated self-employed file.
A bank statement loan can be useful when deposits better reflect the business’s ability to generate income. The lender generally reviews an eligible period of statements, identifies qualifying deposits and applies its program rules to estimate income.
Business bank statements may require an expense factor or other method of accounting for operating costs. Personal bank statements may be handled differently. Transfers, one-time deposits, borrowed funds and non-business deposits may need to be excluded or explained.
Because the formulas vary by lender, two bank-statement programs can produce different qualifying income from the same business. That is exactly where broker comparison can matter.
A borrower who receives 1099 income may look self-employed to one program and fit a specialized documentation path with another. History in the same line of work, consistency of earnings, expenses and the current year’s performance can all matter.
Do not assume that receiving a 1099 means tax returns are automatically unnecessary. The documentation method is determined by the specific program and complete borrower profile.
I want to understand the business before chasing an approval. How long have you been operating? Is the income stable or growing? Are deposits going into personal or business accounts? Do tax returns contain large deductions? Is the purchase primary, second home or investment? How much cash is available? What is the credit profile?
Those answers determine which lending sources are worth evaluating. The goal is to avoid sending the same file blindly to several lenders and hoping one says yes.
Large banks are built around standardized processes. That works beautifully when the borrower fits the box. It can be frustrating when the borrower has multiple businesses, variable income, significant legitimate deductions, or an unconventional way of receiving compensation.
A second review can determine whether the first lender used the only available method—or simply the only method that institution offered. Sometimes the best answer is still conventional. Sometimes an alternative-documentation loan solves the problem. Sometimes the numbers show that waiting and improving the file is smarter. The point is to know.
Alternative-documentation loans can carry different rates, fees, reserve requirements or prepayment terms depending on the program and occupancy. Getting approved is only half the decision.
I want the borrower to see the payment, cash needed and longer-term tradeoffs before choosing the structure. If conventional financing is available and better, use it. If a non-QM option solves a real documentation problem, understand exactly what you are paying for that flexibility.
If you know a purchase is coming, the best time to review self-employed income is before you are under contract. A preliminary review can show whether conventional income is already sufficient, whether another documentation path may be more practical, or whether there is a specific issue worth improving before you shop.
That may mean keeping cleaner business and personal deposit records, avoiding unnecessary movement of funds between accounts, preserving reserves, documenting business ownership, or simply understanding how the most recent tax returns are likely to be analyzed. None of that requires choosing a lender months in advance. It simply gives you time to make decisions with information instead of reacting to an underwriting surprise.
For business owners, preparation is especially valuable because the mortgage file often intersects with tax planning. I do not give tax advice, but I can explain how mortgage underwriting is likely to read the documentation you already have so you can discuss broader decisions with your tax professional.
Possibly. Some eligible non-QM programs may use bank statements, 1099 forms, a profit-and-loss statement or assets instead of traditional tax-return income analysis.
The lender may review eligible deposits over a required period and apply program-specific adjustments or an expense factor. The calculation varies by lender and business profile.
Not every program uses the same history requirement. Conventional and non-QM programs can differ, so the borrower’s complete work history should be reviewed.
Some programs permit eligible business bank statements. The lender may analyze deposits and business expenses under its current guidelines.
Current year performance can be relevant, but the treatment of rising income depends on the program, historical documentation and stability of the business.
No. Many self-employed borrowers qualify conventionally. The best approach is to compare conventional income analysis with alternative-documentation options before deciding.
Tell me how your income works and the home you have in mind. We can identify the documentation questions before you rely on a quote.
Bring the property, timeline and unresolved financing question to your Lansing mortgage partner for Realtors. Use the agent mortgage guide, condo questions and Lansing VA and FHA appraisal guidance to prepare before an offer.
A business return and a personal return can describe different parts of the same income picture. For a partnership or S corporation, the review may need to connect K-1 income, ownership percentage, distributions and business liquidity with the applicable returns, including Form 1065 or 1120S. Money retained in the business is not automatically available for the mortgage payment.
Year-to-date profit-and-loss information and, when required, a balance sheet can help explain how the current year compares with the filed returns. Rising sales alone do not establish usable income if expenses or debt changed. Bring the business structure and recent performance into the discussion before selecting a documentation path.
If conventional analysis does not fit, compare bank-statement documentation and expense methods rather than assuming every 1099 or business-owner file needs the same alternative program. Your tax professional handles tax advice; the mortgage review explains how the selected lender assesses the records.
If you’re wondering how this applies to your plans, send me the question you’re trying to answer. You don’t need to have everything figured out before we talk.
Prefer to start with the numbers? Use the Michigan Home Affordability Calculator or take the 2-Minute Home Buyer Readiness Assessment. Neither is a loan approval.
Discuss my self-employed income · Call 616-319-1640 · Email Mike. For live chat, use the Live Chat control on the homepage.
By Mike Alkema, Michigan Mortgage Broker · NMLS 642953 · 30+ years of mortgage and real-estate lending experience. Content updated October 7, 2026.
Loan programs, terms and availability depend on the borrower, property and lender. This is educational information, not a commitment to lend. Explore Michigan Mortgage Questions.
Tell me how you are paid and what you are trying to accomplish. We can discuss where to start before you gather financial documents.
