Can you get a mortgage with less than two years of self-employment?

When can a shorter business history work?

Fannie Mae's self-employment guidance generally calls for two years of prior earnings. A shorter self-employment history may be considered when:

• The most recent personal and business federal tax returns show a full 12 months of income from the current business.
• Earlier earnings at the same or a higher level are documented, from work providing the same products or services or a role with similar responsibilities.

The lender must also consider experience and business debt. These are Fannie Mae requirements, not a promise that every conventional lender or other loan program will accept the same file. A prior W-2 job in the same field can help document the history, but does not replace the current-business income record.

Why 16 months in business may still leave a timing gap

Map the business start date against the actual period each filed return covers. Ask which return and supporting records the lender needs, and when they can be available. Do this before committing to a purchase deadline.

Enough history is only one part of the review

Fannie Mae's general income guidance requires documented, stable income that is reasonably expected to continue. A strong recent month does not answer that question by itself. Tell the lender about an upcoming compensation change, reduced hours or lost contract so the review reflects the income you expect to have.

Also separate revenue from profit. The IRS explains that net business profit starts with income minus expenses. For example, $100,000 of revenue minus $25,000 of expenses leaves $75,000 of net profit. That arithmetic is not a mortgage qualifying-income calculation. Loan-program adjustments and other obligations still need review.

For the broader documentation comparison, see getting a mortgage with 1099 income and how bank-statement mortgages work. Do not assume an alternative-documentation program automatically solves a short business history.

What to have ready for a useful scenario review

1. A work timeline. When the business began, your ownership, previous roles and when any W-2-to-contractor change occurred.
2. Complete filed returns. Include the schedules and business returns applicable to your business structure, plus prior earnings records. Ask about acceptable transcripts or electronic-filing evidence.
3. Current records. Have year-to-date income and expense records, statements, contracts and business debts available if requested.
4. Your purchase plan. Target price, down payment, desired total housing payment and closing window.

Fannie Mae's tax-documentation rules describe filed returns with supporting schedules, permitted transcripts and signature alternatives. A draft return is not the same as a filed record. Let the lender specify the package rather than guessing from a generic checklist.

If a path is available, compare the full cost as well as whether you qualify. The CFPB's Loan Estimate explainer highlights the payment, closing costs and cash to close. Use the payment calculator to explore a budget, then confirm actual terms with a lender.