Being self-employed offers many freedoms a typical office job does not. There’s more flexibility, and being in control of your own schedule can be great for work/life balance. However, self-employment can also come with income inconsistencies which could make getting a mortgage more challenging. Most self-employed applicants will need two years of tax returns and other important documents to verify their income when applying for a VA loan. We’ve outlined a few key points to consider if you fall under the self-employed category.

Who is Considered Self-Employed?

– Borrowers who own their own business or at least 25% of a partnered business.

– Freelance and contract workers whose income is solely documents with a 1099-MISC form. If you are a retiree or disabled veteran and document your income with a Form 1099, most lenders typically do not view you as self-employed.

Documents to Consider: 

Self-employment situations can vary, but most lenders will assess the following income documents to determine your ability to repay a loan:

–      Full individual tax returns for two years

–      Full income tax returns for two years

–      Year-to-date profit and loss statements

–      Business balance sheets

–      Information on stock-holders and partners (if applicable)


Should you have a side business in addition to a salaried position, and you want that income to be considered by a lender, you should include the same two-year history from tax returns and Form 1099s.

Since each self-employed scenario is so unique, it’s important to work with an experienced VA Loan Specialist. They will help make sure you have the correct income documentation prepared to submit with your loan application.