Mortgage Navigator • Conventional • Self-Employment
Self-employment not used to qualify
Owning a side business does not always mean the mortgage must qualify from that business's income.
Fannie
Fannie says a written personal-income analysis is not required when the borrower qualifies solely with income that is not derived from self-employment and the self-employment is a secondary and separate source of income or loss.
But losses still matter
A business loss or obligation cannot simply be ignored when it affects the borrower's qualifying profile. The lender must determine the impact under the applicable agency rules.
Agency Difference: Freddie has a specific Chapter 5304 framework for self-employment income not used for qualification. The documentation burden can depend on whether the business creates a loss or other risk to the borrower.
Official guide baseline
Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide
Agency guide and AUS findings control. Tax-return, business-analysis and lender-overlay requirements can change the usable income.