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Loan Options · By Use-Case

Self-employed mortgage options in California.

If you are self-employed, you have more loan choices than you might expect. This page is a quick menu of the loan programs that fit self-employed and 1099 borrowers, with the pros of each, in plain language.

The right option depends on how your income looks on paper. Let's compare them.

A self-employed couple budgeting on the sofa while exploring mortgage options
Quick answer

Self-employed borrowers in California can use standard loans (conventional, FHA, VA) with two years of tax returns, or bank statement loans that qualify you on your deposits when write-offs lower your taxable income. Asset-based loans are another option if you have substantial savings. The best fit depends on whether your tax returns reflect your true income.

What this means

The challenge for self-employed buyers is showing income. Write-offs lower your taxable income, which can make you look like you earn less than you do.

So your options split into two groups:

Standard loans — use your tax returns and net income.
Alternative-documentation loans — use deposits or assets instead.

The right one depends on whether your tax returns tell your real income story. See Self-Employed - 1099.

The self-employed loan menu

OptionQualifies onBest forDetails
Conventional / FHA / VATax returns (net income)Steady reported incomeConventional
Bank statement loan12–24 months of depositsHeavy write-offsBank Statement Loans
Asset-based loanYour liquid assetsWealthy, low reported incomeHigh-Net-Worth - Asset-Heavy
P&L or other non-QMProfit-and-loss statementsComplex incomeNon-QM
Step by step

How to choose

1
Look at your tax returns. Do they show enough net income?
2
If yes: A standard loan may be cheapest.
3
If write-offs hide your income: Consider a bank statement loan.
4
If you have big assets but low income: Consider an asset-based loan.
5
Check the cost. Non-QM loans cost more; compare.
6
Plan ahead. How you file taxes affects qualifying.

Requirements (at a glance)

OptionTypical requirement
Standard2 years self-employed, qualifying net income
Bank statement12–24 months of statements, ~660+ credit
Asset-basedSubstantial documented assets
Down paymentHigher for non-QM (often 10%–20%)

Benefits

Multiple paths. A program for most self-employed situations.
Use real income. Bank statement loans count cash flow.
Asset option. Qualify on savings if needed.
Standard loans too. If your returns show enough income.
California-friendly. Built for the state's many business owners.

Potential drawbacks (the honest part)

Non-QM costs more. Higher rates and down payments.
More documentation. Returns, statements, or asset proof.
Write-offs cut income. On standard loans.
Reserves required. Especially for non-QM.
Lender-specific rules. Terms vary; shop around.
Real-world California examples

What it looks like in practice

Example 1 — Standard loan in Sacramento.
Example 1 — Standard loan in Sacramento.

Maria's tax returns show steady net income, so she qualifies for a conventional loan the standard way.

Example 2 — Bank statement loan in San Diego.
Example 2 — Bank statement loan in San Diego.

Marcus has big write-offs. His deposits are strong, so he uses a bank statement loan. See Bank Statement Loans.

Example 3 — Asset-based in San Jose.
Example 3 — Asset-based in San Jose.

The Lee family has large savings but low reported income, so they use an asset-based loan. See High-Net-Worth - Asset-Heavy.

Examples are for learning only. Your options depend on your income and assets.

Common mistakes

1Assuming you cannot qualify. Self-employed buyers qualify often.
2Ignoring bank statement loans. Great for heavy write-offs.
3Forgetting non-QM costs more. Factor in rates and down payments.
4Messy records. Clean documentation helps.
5Not planning taxes. How you file affects qualifying.
6Using one lender only. Compare non-QM terms.
Good questions

Frequently asked questions

Standard loans using tax returns, bank statement loans using deposits, and asset-based loans using savings.

Next steps

Match your income picture to the right loan

Your best self-employed option depends on how your income looks on paper. Compare standard, bank statement, and asset-based paths. EZ Online Mortgage can match your income picture to the right self-employed loan.

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Keep learning

This page is for education only. It is not a loan offer or a promise of approval, rates, or terms. Qualification depends on your individual circumstances. Equal Housing Opportunity · NMLS #362311 · CA DRE #01871814.

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