Self-Employed Mortgage in Phoenix: Bank Statement, 1099 & Tax Return Options
The short answer
A self-employed mortgage in Phoenix can be qualified three main ways: with tax returns (conventional, FHA, or VA), with 12 or 24 months of bank statements, or with 1099 forms. Tax returns usually give you the widest choice of loan programs, while bank statement and 1099 loans help when write-offs make your taxable income look smaller than what you really earn. The right path depends on how your income shows up on paper, so the first step is a review of your returns and deposits before you shop for homes.
Quick facts: self-employed home loans in Phoenix, AZ
Who counts as self-employed: Fannie Mae generally treats you as self-employed if you own 25% or more of a business, or if you are paid on a 1099.
Usual history needed: about two years of self-employment for tax-return loans; shorter histories can work in some cases with prior experience in the same line of work.
Documentation paths: tax returns (conventional, FHA, VA), 12 or 24 months of personal or business bank statements, 1099s, or a CPA-prepared P&L, depending on the program.
2026 conforming loan limit (Maricopa County): $832,750 for a one-unit home. FHFA typically announces next year's limits in late November.
Where bank statement and 1099 loans live: non-QM (non-qualified mortgage) programs offered by wholesale lenders, with guidelines that vary lender to lender.
Local coverage: purchases across Phoenix, AZ and Maricopa County, including North Phoenix zip codes like 85028, 85032, 85050, 85054, 85085 and 85086.
I have been self-employed for a long time. I run my own independent mortgage brokerage, I handle every file personally from the first conversation to the closing table, and I file my taxes like any other business owner. So when a contractor, realtor, consultant, salon owner, or small-business owner in North Phoenix tells me, "I make good money, but my tax return doesn't show it," I don't need the situation explained twice. I've lived it.
The good news: getting a self-employed mortgage in Phoenix is very doable. It just takes a little more planning than a W-2 loan, and it rewards people who look at their paperwork early. Here's how I walk my self-employed clients through it.
How a self-employed mortgage in Phoenix works
Every mortgage comes down to one question: can you show stable, ongoing income that supports the payment? With a W-2 job, a lender looks at pay stubs and a couple of years of W-2s. When you work for yourself, the lender needs a different way to see that income. There are three main ways to document it, and each one opens a different set of loan programs.
Full documentation (tax returns): the traditional route for conventional, FHA, and VA loans.
Bank statement loans: your deposits, not your tax return, are used to figure qualifying income.
1099 loans: for independent contractors paid on 1099 forms, income is based on the 1099s themselves.
Because I'm a mortgage broker with access to 180+ wholesale lenders, I'm not stuck with one bank's version of these rules. That matters a lot for self-employed buyers, since two lenders can look at the same file and come up with very different qualifying income.
Option 1: Qualifying with tax returns (conventional, FHA and VA)
If your tax returns show strong net income, this is usually the best place to start. A tax return mortgage for self-employed borrowers gives you access to the broadest set of programs, including conventional, FHA, and VA loans.
Conventional loan for self-employed borrowers
Fannie Mae and Freddie Mac generally look for about two years of self-employment history. Lenders average your income over that period, starting from your net profit and then adding back certain non-cash items such as depreciation. In some cases, automated underwriting will accept just one year of personal and business returns, typically when the business has been around for several years. If you've been self-employed for less than two years but at least about a year, it can still work when you have prior experience in the same field.
Two things trip people up here. First, a declining income trend year over year gets extra scrutiny. Second, if you own 25% or more of a corporation or partnership, the lender may need your business returns too, not just your personal 1040.
FHA loan for self-employed buyers
An FHA loan for self-employed buyers follows a similar two-year approach with tax returns, and it can be more flexible on credit. Self-employed veterans can use VA financing with similar documentation. If you want to compare the two side by side, my guide to FHA vs. conventional loans in North Phoenix breaks it down.
The catch with any tax-return loan is simple. The lender uses what you reported to the IRS. If you (smartly) took every legitimate deduction, your qualifying income may be lower than you expect. That's where the next two options come in.
Option 2: Bank statement loans in Arizona
A bank statement loan in Arizona uses 12 or 24 months of your personal or business bank statements to figure income, instead of your tax returns. These are non-QM loans, which means they sit outside the Fannie Mae and Freddie Mac rulebook and each wholesale lender sets its own guidelines.
Here's the general idea:
Personal bank statements: the lender usually counts qualifying deposits, minus transfers and one-time items.
Business bank statements: the lender applies an expense factor to your business deposits to estimate profit. That factor can vary by lender and by type of business, and some lenders will use a figure from your CPA instead of a standard one.
What gets backed out: transfers between your own accounts, loan proceeds, and unusual one-time deposits generally don't count.
Bank statement loans typically ask for more reserves and a larger down payment than conventional loans, and pricing is usually higher. In exchange, they can turn a "you don't qualify" into a "here's your pre-approval." I wrote a deeper explainer on bank statement loans for self-employed borrowers if you want the full walk-through.
Option 3: 1099 mortgage loans for independent contractors
If you're a 1099 contractor, such as a realtor, nurse on contract, rideshare driver, tech consultant, or sales rep, a 1099 mortgage loan may be the simplest route. Instead of digging through Schedule C, the lender looks at your 1099 forms (usually one or two years) and applies an expense factor that varies by lender. Some programs also ask for a recent pay record or a written verification that you're still working with the same companies.
For many contractors, this self-employed mortgage option produces a qualifying income much closer to what they actually bring home.
Other non-QM options worth knowing
P&L-only loans: some lenders will qualify you off a profit and loss statement prepared or reviewed by a CPA or licensed tax preparer.
Asset-based loans: if you have significant savings or investments, some programs can use those assets to help qualify.
DSCR loans: buying a rental instead of a primary home? A DSCR loan qualifies based on the property's rent rather than your personal income, so your self-employment paperwork matters much less.
What documents do self-employed borrowers need?
Every program is different, but here's the checklist I give most self-employed buyers before we start their pre-approval:
Two years of personal tax returns, all schedules included (for tax-return loans)
Two years of business returns if you own 25% or more of an S-corp, partnership, or corporation
Year-to-date profit and loss statement, if it's later in the year
12 or 24 months of bank statements (for bank statement loans), all pages
1099 forms (for 1099 loans)
Proof the business is active: a business license, CPA letter, or website/listing
Two months of statements for the accounts holding your down payment and reserves
One tip for any self-employed mortgage in Phoenix: keep your business and personal accounts separate. Mixed accounts make a bank statement loan harder to read.
Getting pre-approved as a self-employed buyer in Phoenix, AZ
A true pre-approval matters even more when you're self-employed, because sellers and listing agents in Phoenix want to know your financing will hold up. A quick pre-qualification based on what you tell a lender over the phone doesn't carry much weight. (Here's the difference between pre-approval and pre-qualification.)
When we work together, I review your actual returns, statements, or 1099s up front. Then I compare how different wholesale lenders would calculate your income and pick the program that fits. Think of it like setting a fantasy football lineup: the same player can score very differently depending on the league's scoring rules, so you want the league that counts what you actually do well.
I also look at whether you might benefit from down payment help. Through my wholesale lender network, I have access to multiple lender-sponsored down payment assistance programs, including forgivable options for qualified buyers. Terms and eligibility vary by program, and not every program allows self-employed income documented by bank statements, so we check that early.
Timing tips for self-employed borrowers
Talk to a lender before you file your taxes. If you're planning to buy in the next year or two, your write-off strategy affects what you can qualify for. Have that conversation with your CPA or tax advisor and loop me in.
Watch the calendar. Early in the year, lenders may ask about your most recent tax year even if it isn't filed yet.
Why a local mortgage broker in North Phoenix helps
A self-employed mortgage is where working with a mortgage broker really pays off. A bank or retail lender has one set of guidelines. As an independent broker, I can shop your file across 180+ wholesale lenders, from conventional and FHA to non-QM bank statement and 1099 programs, and match you with the one that counts your income most accurately.
I live in North Phoenix, in 85028, and I work with buyers throughout the area, from the SR-51 and Paradise Valley Village corridor up Cave Creek Road and Tatum Boulevard to Desert Ridge, Norterra, and Anthem along I-17. If you're still getting your bearings on the area, start with my guide to buying a home in North Phoenix. I'm also licensed in California, which helps self-employed clients relocating from there.
And when you're self-employed, you know there's no one else to call when something stalls. I personally handle every file from start to finish, so you're never getting passed around between departments.
Self-employed mortgage FAQs
Can I get a self-employed mortgage in Phoenix with only one year of tax returns?
Sometimes, yes. Fannie Mae's automated underwriting can accept one year of personal and business returns in certain cases, typically when the business has been established for several years. Bank statement and 1099 programs offer other paths if tax returns don't fit. A quick review of your file will show which option applies.
How long do I need to be self-employed to buy a house?
Most conventional, FHA, and VA loans look for about two years of self-employment history. A shorter history, often at least a year, can work if you previously worked in the same field. Non-QM programs set their own rules, and some are more flexible on history.
What is a bank statement loan in Arizona?
A bank statement loan is a non-QM mortgage that qualifies you using 12 or 24 months of personal or business bank deposits instead of tax returns. For business statements, lenders apply an expense factor to estimate profit. These loans help business owners whose tax returns show lower income because of deductions.
Can I get a mortgage as a 1099 contractor?
Yes. 1099 contractors can qualify with tax returns like any self-employed borrower, or with a 1099 mortgage loan that uses your 1099 forms to calculate income. 1099 loans are offered through non-QM wholesale lenders, and the expense factor and history required vary by lender.
Do self-employed borrowers need a bigger down payment?
For tax-return loans like conventional, FHA, and VA, self-employed borrowers generally follow the same down payment rules as W-2 borrowers. Non-QM bank statement and 1099 loans typically require a larger down payment and more reserves. There are low down payment options for qualified buyers, so let's run your real numbers.
Do write-offs hurt my chances of getting a mortgage?
They can for tax-return loans, because lenders qualify you on net income after deductions, though certain items like depreciation may be added back. If deductions reduce your income too much, a bank statement or 1099 loan may be a better fit. Talk with your CPA or tax advisor before changing your tax strategy.
Is a mortgage broker better for self-employed buyers?
A mortgage broker can compare how many lenders calculate your income, which matters more for self-employed borrowers than anyone else. As an independent broker with access to 180+ wholesale lenders, I can match your file to the lender whose guidelines fit it best instead of forcing it into one bank's box.
Self-employed and buying in Phoenix, AZ? Let's find the right loan.
Send me your returns, statements, or 1099s and I'll show you which programs count your income best, before you write an offer.
Data sources: Fannie Mae Selling Guide B3-3.2-01 (Underwriting Factors and Documentation for a Self-Employed Borrower) and B3-3.5-01 (Income and Employment Documentation for DU); Freddie Mac Seller/Servicer Guide 5304.1; FHFA 2026 conforming loan limits for Maricopa County. Non-QM bank statement and 1099 program guidelines vary by lender and change often. This article is general information, not tax advice; consult a CPA or tax advisor about your situation.
Peter Seroter / Optimized Home Loans | Powered by Barrett Financial Group
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