Mortgage Navigator • Conventional • Self-Employment

One year vs. two years of tax returns

One-year documentation exists, but it is an agency exception—not a generic shortcut.

Build My Mortgage Game PlanConventional Navigator

Fannie one-year return option

Fannie may permit one year of personal and business tax returns when the business has existed for at least five years and the borrower has owned at least 25% for the past five consecutive years, with the required cash-flow analysis.

Fannie business-return waiver

In another scenario, business returns may be waived when two years of personal returns are provided, the borrower uses personal funds for closing/reserves, has been self-employed in the same business for at least five years, and personal returns show increasing self-employment income from that business.

Freddie

Freddie's Chapter 5304 determines the applicable tax-return period based on the self-employment and business profile and permits additional current business documentation where needed to establish stability.

Tax transcript timing matters: “most recent” means the return that should have been filed under the agency's current tax-return timing rules, including extension treatment where applicable.

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.