Self-Employed and Business Commission Income for a Mortgage Loan Approval for Fannie Mae, FHA, VA, KHC, USDA and Rural Housing in Kentucky
Self-Employed and Business Commission Income for a Mortgage Loan Approval A borrower is considered self-employed if they own 25.00% or more interest in a business. The four basic types of business structures are: sole proprietorship, corporations, limited liability or “S” corporations, and partnerships. • The borrower must provide two years of individual federal tax returns and corporate partnership federal tax returns (if applicable to business). o Individual Federal tax returns show increasing self employed income over the past two years, • A profit and loss statement (P&L) and a balance sheet is required if more than a calendar quarter has elapsed since date of most recent calendar year or fiscal-year end tax return was filed by the borrower. If income used to qualify the borrower exceeds the two-year average of tax returns, an audited P&L or signed quarterly tax returns obtained from the IRS are required. • The existence of the borrower’s business mu...