Dreaming of homeownership but worried your short employment history will hold you back? The good news is—it’s still possible to get approved for a mortgage, even if you haven’t been at your job for years. Whether you’re newly self-employed, recently switched careers, or just started a new job, lenders offer options that can help you qualify. Here’s what you need to know.
Mortgage With Short Employment History: Conventional Loans: 1 Year of Tax Returns Can Work
For conventional loans, most lenders prefer a two-year work history. However, if you're self-employed and have at least one full year of tax returns, you may still qualify—especially if your income is stable and increasing. You’ll need to show strong financials, such as savings, good credit, and consistent earnings.
FHA Loans: 12 Months in Business Can Be Enough
If you’re self-employed and want to go the FHA route, you need to have been in business for at least 12 months. FHA lenders will typically require tax returns, profit and loss statements, and bank statements to verify your income. While FHA loans are more flexible, you still need to prove your income is steady.
Alternative Loan Options for Under 12 Months of Employment
If you don’t meet the 12-month mark for a conventional or FHA loan, you still have options:
No-Income or Alternate Income Loans – Ideal for entrepreneurs and freelancers, these loans require strong credit and a solid down payment.
DSCR (Debt Service Coverage Ratio) Loans – If you’re investing in real estate, lenders may approve a loan based on rental income instead of personal income history.
Tips to Improve Approval Chances
Boost Your Credit Score – A higher score increases your chances of approval.
Save for a Larger Down Payment – More money down can reduce lender risk.
Show Strong Bank Statements – A steady cash flow can help offset a short work history.
Work with a Mortgage Broker – They can connect you with lenders who offer flexible underwriting.
Final Thoughts
A short employment history doesn’t have to stop you from buying a home. Whether you have one full year of tax returns, 12 months in business, or less, there’s a loan option that can work for you. The key is finding the right lender and preparing your finances to prove you’re a strong borrower.
Need help finding the right loan?
Jonathan Shupe NMLS ID# 1649211 is Manager of Shupe Lending Group NMLS ID# 2478065. Jonathan Shupe and his team of loan officers are licensed in multiple states. Many of the borrowers of Shupe Lending Group are individuals who did not qualify at other lenders due to those lenders overlays on government and conventional loans. We have a reputation of being able to work with over 270 different lenders to be able to offer out clients dozens of non-QM and alternative financing loan programs. Any non-QM mortgage loan program available in the market will be offered by our team at Shupe Lending Group. Our team is available 7 days a week, evenings, weekends, and holidays.
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