Most self-employed borrowers hit the same wall. The business is doing well, the bank account shows it, but the tax return shows a fraction of that after deductions. A conventional lender reads the return, not the bank account, so the number they qualify you on is the smaller one.
This site explains the other ways income can be documented, what each one asks of you, and how New York specifics like co-op boards, the high-cost loan limit and the mortgage recording tax change the picture. It's a resource from ClearPoint Mortgage Advisors (The Newfinity Group INC., NMLS #1192844, a Registered Mortgage Broker with the NYS Department of Financial Services).
Find your situation
Where in New York?
Why do self-employed New Yorkers get turned down?
Conventional lenders qualify self-employed borrowers on taxable income from your returns, usually averaged over two years. Every deduction that lowers your tax bill also lowers the income a lender can count. A consultant who grosses well but writes off a home office, a vehicle, travel and equipment can end up with a qualifying income that looks like a part-time salary.
Some non-cash items, such as depreciation, can sometimes be added back in the lender's cash-flow analysis. Most real expenses cannot. That gap is the reason alternative documentation programs exist.
Talk to your CPA before changing how you file. Paying more tax to qualify is a tradeoff only you and your CPA can weigh.
What are the ways to document self-employed income?
There are several paths, and they are not interchangeable. Each one counts your income differently and comes with its own tradeoffs.
- Tax write-offs problem: how deductions cut qualifying income.
- Bank statement loans: how deposits become qualifying income.
- 1099 mortgage: how contractors can qualify on gross earnings.
- P&L mortgage: when a prepared profit-and-loss statement can carry the file.
- Less than 2 years self-employed: the 12-month rule and prior experience.
- Compare options: every path side by side.
| Path | What it uses | Often a fit for |
|---|---|---|
| Full-doc conventional | Two years of personal and business tax returns | Owners whose returns already show strong income |
| Bank statement loan | 12 or 24 months of personal or business statements | Owners with heavy write-offs and steady deposits |
| 1099 loan | Gross 1099 earnings less a set expense factor | Independent contractors paid on 1099s |
| P&L loan | A profit-and-loss statement from a CPA, EA or licensed preparer | Owners whose books are current but returns lag |
| Asset-based | Liquid assets instead of income | Borrowers with substantial savings or investments |
Example: a Queens contractor with strong deposits and a thin return
A general contractor in Queens works year-round and deposits client payments into a business account. After writing off a truck, tools, subcontractors and insurance, the tax return shows modest net income, which is what a conventional lender qualifies on. A bank statement program would instead look at 12 or 24 months of deposits and apply an expense factor based on the business. Whether that produces a better result depends on the actual deposits and the program's rules.
Self-employed mortgage requirements in NY
Every self-employed home loan in New York starts with the same core questions, whatever the documentation path. Requirements vary by lender and program, but underwriters generally look at:
- History: usually two years self-employed, with exceptions covered below.
- Income documents that match the path: returns, bank statements, 1099s or a P&L.
- Credit: it matters on every program, and minimums differ by program.
- Down payment and reserves: sourced and seasoned funds. Non-QM usually asks for more.
- Debt-to-income: your monthly debts compared with the income the lender can count.
- The property: it has to meet the lender's rules, and co-op boards run their own review.
Credit, down payment and reserve requirements vary by program, so a file that doesn't fit one lender may fit another.
Is a non-QM loan safe?
Bank statement, 1099 and P&L programs are usually non-QM, short for Non-Qualified Mortgage. That only means the loan falls outside the CFPB's Qualified Mortgage definition. Lenders still have to make a reasonable, good-faith determination that you can repay. It is not a no-doc loan and it is not subprime by definition.
The tradeoffs are real, though. Non-QM rates are typically higher than conventional, and down payment and reserve requirements are usually larger. Many self-employed buyers weigh that cost against waiting two more tax years.
What mortgage assistance programs are available in New York?
The State of New York Mortgage Agency (SONYMA) offers mortgage programs aimed at first-time buyers, plus a down payment assistance loan that can be paired with its mortgages. SONYMA sets income and purchase price limits by program, property type and region, and you apply through a participating lender rather than through SONYMA itself.
In the five boroughs, HPD's HomeFirst Down Payment Assistance Program offers a forgivable loan toward the down payment or closing costs for first-time buyers who meet household income limits, complete a homebuyer education course through an HPD-approved agency and buy a one- to four-family home, condo or co-op to live in.
Ask how your self-employment income would be counted, and check current guidelines, since program terms change.
What's different about buying in New York?
New York adds layers most national guides skip. Three matter most for self-employed buyers.
- Loan limits: the 2026 one-unit conforming limit is $1,249,125 in all five NYC boroughs, Nassau and Westchester, compared with an $832,750 baseline in most of the country. Loans above the local limit are jumbo loans, which often have stricter documentation.
- Co-ops and condos: co-op boards review your finances separately from the lender, often asking for two years of returns and a CPA letter even when the lender uses bank statements. Many non-QM lenders do not lend on co-ops at all. Condos face a building review, and non-warrantable condos are often financed with portfolio or non-QM loans.
- Closing taxes: in NYC, the buyer's mortgage recording tax runs about 1.8% on loans under $500,000 and about 1.925% at $500,000 and up on homes and condo units. Co-op loans are not subject to it. Westchester's rate is 1.3%. New York also charges a 1% mansion tax on purchases of $1 million or more.
On a New York refinance, a CEMA can limit recording tax to the new money only.
Where do we help?
Looking for a mortgage for self-employed buyers in NYC or nearby? The focus is New York: Manhattan, Brooklyn, Queens, the Bronx and Staten Island, plus Nassau and Suffolk on Long Island and Westchester County. Each area has its own housing mix. Manhattan and parts of Queens and the Bronx are heavy on co-ops. Brooklyn, Queens, the Bronx and Staten Island have many two- to four-family homes, where rental income from the other units can help. Long Island and Westchester lean toward single-family houses.
ClearPoint is licensed in NY, NJ, FL, CT, PA and VA, so inquiries are accepted from those six states.
How do you compare self-employed mortgage lenders in New York?
Not every lender offers alternative documentation, and those that do set their own rules. Mortgage brokers arrange loans through outside lenders, mortgage bankers and direct lenders fund their own loans, and retail banks offer their own products. Any can be a fit; what matters is which programs they can reach. Questions worth asking:
- Which documentation paths do you offer, and which fits how I earn?
- How would you calculate my income, and what expense factor would apply?
- Will you finance the property I want, including a co-op or a non-warrantable condo?
- What documents do you need up front?
Reviews and Reddit threads can flag service problems, but they can't tell you how a lender will count your income.
How does it work?
There is no application on this site and no credit pull to get started. The process is simple.
- Answer a few quick questions about your purchase or refinance, how you earn your income, how long you've been self-employed and your timeline. It takes about 2 minutes.
- A ClearPoint advisor reviews your scenario and looks at which documentation paths could fit.
- You hear back about your options, including what each path would ask of you.
Common questions
Do you need tax returns to get a home loan?
Not always. Conventional loans generally require tax returns, but non-QM programs can use bank statements, 1099s, a prepared P&L or assets instead. Expect higher costs and larger down payment and reserve requirements than conventional, and know that a co-op board may still ask for your returns even if the lender doesn't.
Is it possible to get a loan while self-employed?
Yes. Self-employed borrowers can qualify for mortgages; lenders just document the income differently. Conventional loans use your tax returns, usually two years of them. If write-offs make your returns understate what you earn, non-QM programs can use bank statements, 1099s, a prepared P&L or assets. Approval still depends on your credit, history, assets and the property, and requirements vary by program.
What disqualifies you from a mortgage?
Common reasons include income that can't be documented or is falling, too much monthly debt compared with income, credit problems such as recent late payments, not enough funds for the down payment, closing costs and reserves, and a property the lender won't finance. For self-employed borrowers, a frequent issue is write-offs shrinking qualifying income, which a different documentation path may address.
What credit score is needed to buy a house?
It depends on the loan program. Conventional, government-backed and non-QM programs each set their own credit requirements, and your score also affects pricing. Credit, down payment and reserve requirements vary by program, so no single number applies to everyone. If your credit has recent problems, an advisor can review which programs may still be worth a look.
Is it hard to get a mortgage when you're self-employed?
It's more paperwork, not necessarily harder. The main problem is that write-offs lower the income a conventional lender can use. If your returns show enough income, a standard loan may work. If they don't, alternative documentation programs exist, though requirements vary by lender and program.
Can I get a mortgage without two years of tax returns?
Possibly. Fannie Mae guidelines allow lenders to consider income from someone self-employed less than two years if the most recent returns show a full 12 months of self-employment. Some non-QM programs also allow one year with prior experience in the same line of work.
What is the conforming loan limit in New York City for 2026?
The 2026 one-unit conforming limit is $1,249,125 in all five boroughs, as well as Nassau and Westchester counties. Loans above that amount are jumbo loans, which typically come with stricter documentation and reserve requirements.
Can I buy a co-op if I'm self-employed?
It can be done, but there are two hurdles: the lender and the board. Many non-QM lenders do not lend on co-ops, and boards often want two years of returns and a CPA letter regardless of how the lender documents income. Planning for the board package early helps.
Will answering the questions affect my credit?
The questionnaire asks about your situation; it isn't a loan application. An advisor reviews what you share and follows up to talk through options. Any credit review would come later and only with your permission.
Do you work outside New York?
ClearPoint is licensed in New York, New Jersey, Florida, Connecticut, Pennsylvania and Virginia. This site focuses on New York, but inquiries from those other five states are welcome too.