Self Employed Mortgage Texas and Austin
Five documentation paths for self-employed Austin borrowers: conventional with tax returns, bank statement, P&L only, 1099 only, and asset depletion. I run all five to find the one that closes.
Yes, a self-employed borrower in Austin can get a home loan, and I document non-W-2 income one of several ways: conventional with two years of tax returns, a bank statement loan, P&L only, 1099 only, or asset depletion. In Austin, the right path usually depends on how heavily your business writes down income at tax time. This fits Austin business owners, 1099 contractors, and gig workers whose tax returns understate their real cash flow.
A self-employed mortgage in Austin is any residential mortgage where qualifying income comes from a business the borrower owns, a 1099 contracting relationship, or another non-W-2 source. Documentation paths split between conventional (two years of personal and business tax returns, calculated with Fannie Mae or Freddie Mac worksheets) and non-QM programs (bank statement, P&L only, 1099 only, asset depletion).
Why it matters in Austin: heavy tax write-downs that benefit a business owner in April reduce the income a conventional underwriter can use in October. The right structure on day one determines whether the file closes at all.
Key facts
- Conventional: two years of personal and business tax returns, qualifying income per Fannie Mae Selling Guide B3-3.2 or Freddie Mac Section 5304
- Bank statement: non-QM; 12 or 24 months of business or personal statements; lender-set expense factor (often 50%) applied to deposits
- P&L only: non-QM; CPA-prepared profit-and-loss statement, occasionally a self-prepared version with the right lender
- 1099 only: non-QM; one or two years of 1099s plus a YTD pay verification
- Asset depletion: liquid investable assets divided by a term (commonly 84 months) used as qualifying income
- Two-year self-employment history generally required for conventional; one-year possible on some non-QM
- Austin metro counties: Travis, Williamson, Hays, Bastrop, Caldwell, Burnet; conventional limit $832,750 (1 unit, statewide); FHA limit varies by county
Documentation paths compared
Programs commonly used by self-employed Austin borrowers. Specific qualification depends on the file; I run the file across paths before recommending one.
| Path | Documentation | Typical history needed | Pricing tier |
|---|---|---|---|
| Conventional | Two years personal + business tax returns | Two years | Conforming, usually tighter pricing |
| Bank statement | 12 or 24 months of bank statements | Two years (some 12 mo allowed) | Non-QM (above conventional) |
| P&L only | CPA-prepared P&L (some self-prepared with right lender) | Two years preferred | Non-QM |
| 1099 only | One to two years of 1099 forms | One to two years | Non-QM |
| Asset depletion | Liquid asset statements; divided by 84 months | Asset-driven, not income-history | Non-QM |
Who each path fits
Conventional with tax returns fits
- Self-employed two years or more
- Tax returns show enough qualifying income after the lender worksheet
- No heavy write-downs that crater Schedule C income
- Standard W-2 or K-1 income alongside the self-employed income
Bank-statement fits
- Business is consistently profitable but tax returns understate cash flow
- Owner pays themselves through draws rather than a W-2
- Last two filing years show heavy write-downs (depreciation, equipment, home office, vehicle)
- 12 or 24 months of clean business or personal statements with steady deposits
P&L only fits
- CPA-prepared books are current and clean
- Borrower wants the simplest documentation path
- Comfort with non-QM pricing
Asset depletion fits
- Borrower has significant liquid or near-liquid investable assets
- Self-employed income is irregular, project-based, or hard to document
- Borrower wants a path that does not require new tax returns
How I handle self-employed Austin files
I run every self-employed Austin file through both conventional and at least one non-QM path on day one. The cheapest-rate program is not always the one that closes; the one that closes is the one where the documentation actually exists and is clean.
I would rather have you on a slightly higher-rate bank-statement file that funds than on a conventional file that gets killed in underwriting because the depreciation schedule turned your $200,000 Schedule C net into $40,000 of qualifying income.
Most self-employed Austin borrowers underestimate two things:
- First, how heavily depreciation, depletion, and home-office deductions on Schedule C will reduce conventional qualifying income (some of those add back; the lender worksheet decides).
- Second, how clean the bank statements need to be: regular salary-equivalent deposits, no large unexplained transfers, no inter-account shuffling that confuses the deposit calculation.
I review the last 24 months of statements before we apply, so we catch issues on day one rather than at underwriting.
I am Austin-based and licensed statewide in Texas. I work all the Austin-metro counties self-employed borrowers actually buy in: Travis, Williamson, Hays, Bastrop, Caldwell, Burnet. If you are searching self employed mortgage Texas, the real issue is usually which income path matches your documentation: tax returns, bank statements, P&L only, 1099 only, or asset depletion. Send me a recent tax return summary and a sample month of bank statements; I will tell you which path your file lines up with before we formally apply.
Sources & methodology
All figures verified against primary sources as of May 26, 2026.
- Fannie Mae Selling Guide B3-3.2: Self-Employment Income
- Freddie Mac Single-Family Seller/Servicer Guide Section 5304: Self-Employed
- FHFA: 2026 Conforming Loan Limit Values announcement (Nov 25, 2025)
- HUD Mortgagee Letter 2025-23: 2026 FHA Forward Limits
- Kellibrooke: Bank Statement Program page (companion)
Common self-employed mortgage questions
Can a self-employed Austin borrower get a conventional mortgage?
Yes. Conventional underwriting (Fannie Mae and Freddie Mac) accepts self-employed borrowers with two years of personal and business tax returns. The income is calculated using the lender's worksheet, which adds back depreciation, depletion, and certain non-cash items. If you write down income heavily on Schedule C or via S-corp distributions, conventional may underwrite to a lower qualifying income than your gross.
What is a bank statement mortgage?
A bank statement mortgage is a non-QM program where qualifying income is derived from deposits into the borrower's business or personal bank account over a 12 or 24-month window, applying a lender-set expense factor. It is designed for self-employed borrowers whose tax returns understate cash flow due to legitimate write-downs.
How is 1099 income treated for an Austin mortgage?
1099 contractor income generally needs a two-year average for conventional, or can qualify on a one-year 1099 file with some lenders if the contracting relationship is stable. Bank-statement and P&L-only programs are alternatives when tax returns understate take-home pay.
What is a P&L only mortgage?
A P&L-only mortgage uses a CPA-prepared (or self-prepared, lender-dependent) profit and loss statement instead of tax returns or bank statements to qualify the borrower. It is a non-QM program and pricing reflects the looser documentation.
What is asset depletion underwriting?
Asset depletion (sometimes called asset utilization) lets a borrower qualify based on liquid assets divided by a term (often 84 months). It works for borrowers with significant savings or investment accounts who do not draw a W-2 paycheck or whose self-employed income is irregular.
Do I need to be in business for two years to qualify in Austin?
Most conventional programs require a two-year history of self-employment, with exceptions for borrowers transitioning from a closely related W-2 role. Non-QM programs can sometimes underwrite a one-year self-employment history with stronger compensating factors.
Will my Austin mortgage close faster on bank statements or tax returns?
Tax-return files tend to clear faster because conventional underwriting has fewer subjective inputs. Bank-statement files require deposit-by-deposit categorization, which adds time. I structure the file on day one so the path that closes fastest is the path we run.
How do I get a self-employed mortgage in Austin?
Start by sending me a recent tax return summary and a sample month of bank statements. I run your file through both conventional and at least one non-QM path before we formally apply, so we pick the documentation route that actually lines up with what you can show. I am Austin-based and licensed statewide in Texas, and I handle every file personally from pre-approval to clear-to-close.
Can I get a bank statement loan in Austin with no tax returns?
Yes. A bank statement loan is a non-QM program that qualifies you from deposits into your business or personal account over a 12 or 24-month window instead of tax returns, applying a lender-set expense factor. It is built for self-employed Austin borrowers whose returns understate cash flow. You can read more on my bank statement program page.
Is it harder to get a self-employed home loan in Austin?
It is not necessarily harder, but it is more document-driven. A W-2 borrower hands over pay stubs; a self-employed borrower's income has to be reconstructed from tax returns, bank deposits, or a profit-and-loss statement. The work is in structuring the file correctly up front. When the documentation path matches your situation, a self-employed file moves through underwriting much like any other.
What documents do I need for a self-employed mortgage in Austin?
For a conventional file, expect two years of personal and business tax returns plus a year-to-date profit-and-loss. For a bank statement loan, plan on 12 or 24 months of business or personal statements. For 1099 only, your 1099 forms plus a year-to-date verification. For asset depletion, statements for your liquid investable accounts. I tell you the exact list once I see which path your file fits.
How do you calculate self-employed income for a mortgage?
It depends on the path. On a conventional file I use the Fannie Mae or Freddie Mac worksheet, which starts from your net business income on the tax returns and adds back non-cash items like depreciation and depletion, then averages across two years.
On a bank statement loan I total the deposits into your business or personal account over a 12 or 24-month window and apply a lender-set expense factor instead of using tax returns at all.
Because the methods land in different places, I run your file through more than one before we apply so you see which calculation gives you the most usable qualifying income.
Do mortgage lenders use gross or net income for self-employed borrowers?
Conventional lenders qualify you on net, not gross. They start from the net profit on your tax returns and add back specific non-cash deductions such as depreciation and depletion, so your qualifying income usually sits below your gross revenue.
This is exactly why heavy write-downs can hurt a self-employed borrower at mortgage time even though they help at tax time.
A bank statement loan sidesteps the tax returns and instead applies a lender-set expense factor to your deposits, which is often why it produces a higher qualifying income for an Austin business owner who writes down a lot.
How many months of bank statements do you need?
A bank statement loan runs on either 12 or 24 months of statements, depending on the lender and how your deposits look. Twelve months is faster to document; 24 months can smooth out a seasonal or uneven year.
Statements can be from your business account, your personal account, or a mix, as long as the deposits clearly trace to your business. I review your statements before we apply so we choose the window that presents your income in the strongest, cleanest way.
What does a self employed mortgage Texas lender look for?
A self employed mortgage Texas file comes down to stable business history, usable qualifying income, clean documentation, credit, assets, and the property. The right path may be conventional tax returns, a bank statement loan, profit-and-loss only, 1099-only documentation, or asset depletion. I run more than one path before we apply so we do not guess.
Self-employed in Austin?
Send me your last tax return summary and a sample month of bank statements. I will tell you which documentation path your file fits before we formally apply.