The standard for a self-employed borrower is the most recent two years of signed personal federal tax returns, plus business returns when the business files its own. Fannie Mae, and Freddie Mac under its Streamlined Accept and Standard documentation levels, accept one year of returns when the business has existed at least five years and the borrower has held 25% or more of it for at least five years; the returns must show at least 12 months of self-employment income. FHA and VA require two years of individual returns and waive business returns only under specific conditions.
Fannie Mae (conventional)
- The lender may verify income with signed individual and, in some cases, business federal returns filed for the past two years, with all applicable schedules. Fannie Mae B3-3.5-01
- One year of personal and business returns is allowed if the business has existed for five years and the borrower has held an ownership share of 25% or more for the past five consecutive years. Fannie Mae B3-3.5-01
- With less than two years of self-employment, the most recent signed personal and business returns must show a full year (12 months) of self-employment income from the current business. Fannie Mae B3-3.5-01
- When two years of individual returns are provided, business returns may be waived if personal funds cover down payment, closing costs and reserves, the borrower has been self-employed in the same business for at least five years, and individual returns show increasing self-employment income. Fannie Mae B3-3.5-01
Freddie Mac (conventional)
- In most cases a two-year history of current self-employment is required; with less than two years, the borrower needs a combined two-year history with the prior job in the same or a similar field. Freddie Mac 5304.1(c)
- The federal returns, with all schedules and forms, must reflect at least 12 months of self-employed income. Freddie Mac 5304.1(n)
- Under the Streamlined Accept and Standard documentation levels, the most recent year of complete signed returns is required when the business has existed five years or more, and the most recent two years otherwise; partnerships, S-corporations and corporations add business returns for the same period. Freddie Mac 5304.1(n)
- The five-year column applies only if the borrower has been self-employed, with 25% or more ownership, in the same business for at least five years. Freddie Mac 5304.1(n)
FHA
- Under both TOTAL Scorecard and manual underwriting, the lender must obtain complete individual tax returns for the most recent two years, including all schedules. FHA 4000.1 II.A.4.c.x FHA 4000.1 II.A.5.b.x
- Under TOTAL, business returns for the most recent two years are also required unless individual returns show increasing self-employment income over two years, funds to close do not come from business accounts, and the loan is not a cash-out refinance. FHA 4000.1 II.A.4.c.x
- Self-employment of one to two years counts only if the borrower previously worked at least two years in the same line of work or a related occupation. FHA 4000.1 II.A.4.c.x
VA
- The lender obtains signed and dated individual returns with all schedules for the previous 2 years, or longer if needed to show a satisfactory earnings record; corporations and partnerships also need 2 years of signed business returns. VA Pamphlet 26-7, Ch. 4 Topic 2.j
- Self-employment income is generally stable after 2 years; less than 2 years usually needs previous related employment or specialized training, and less than 1 year can rarely qualify. VA Pamphlet 26-7, Ch. 4 Topic 2.j
- For AUS Accept/Approve files, business returns are not required if the borrower proves ownership for at least the past 5 years, individual returns show consistent income for 2 years, and closing funds do not come from the business. VA Pamphlet 26-7, Ch. 4 Topic 8.e
Sources
- Fannie Mae Selling Guide, September 2, 2026 version: B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower (p. 364, 365)
- Freddie Mac Single-Family Seller/Servicer Guide, September 16, 2026 version: 5304.1(c), Self-employment history requirements (p. 5304-3, 5304-4); 5304.1(n), Documentation requirements (p. 5304-16, 5304-17)
- FHA Single Family Housing Policy Handbook 4000.1, August 12, 2026 version: II.A.4.c.x, Self-Employment Income (TOTAL) (p. 230); II.A.5.b.x, Self-Employment Income (Manual) (p. 309)
- VA Lender's Handbook (VA Pamphlet 26-7), August 12, 2026 version: Chapter 4, Topic 2.j Self-Employment Income Analysis Guidelines (PDF p. 80, 81); Chapter 4, Topic 8.e Documentation Guidelines for Borrower(s) Self-Employed (PDF p. 115)
Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.