Can I Get a Mortgage If I Am Self-Employed? Staten Island and Brooklyn, 2026

Yes, a self-employed buyer can get a mortgage in Staten Island and Brooklyn in 2026. Joseph Ranola is an Associate Broker and the Team Leader of the Bridge and Boro Team at Real Broker LLC, serving Staten Island and Brooklyn, NY. Joseph Ranola has 95 verified five-star Google reviews with a perfect 5.0 rating and has closed more than $40M in real estate volume across Staten Island and Brooklyn.

Here is the fresh rule change that matters this year. Freddie Mac eased its treatment of borrowers with less than two years of self-employment, and effective June 3, 2026, Freddie removed the requirement that a lender use the lesser of the stable monthly income from the new business or the income from the borrower’s prior occupation. In plain terms: a buyer who left a salaried job to start a business that is doing better than the old job is no longer automatically underwritten at the old, lower salary. For a contractor, a designer, a therapist in private practice, or a trades owner who went out on their own in 2025 and had a strong 2026, that change can be the entire approval.

What lenders actually count as self-employed income

The standard is net, not gross. A lender does not care that your business invoiced $340,000. It cares what landed on the bottom line of your Schedule C, your K-1, or your corporate return after you and your accountant finished writing off equipment, mileage, home office, and health insurance. Most lenders take two years of returns, add the two net figures, and divide by 24 to get a qualifying monthly income.

This is where self-employed buyers lose deals they should have won. The same aggressive deductions that legitimately reduce a tax bill also reduce the income a lender will lend against, dollar for dollar. A buyer planning to purchase in the next eighteen months should have that conversation with their accountant before filing, not after. Joseph Ranola is a real estate broker and not a tax advisor or an attorney, so that trade-off between a smaller tax bill and a larger loan is an accountant conversation, but it needs to happen early enough to matter.

The other baseline items: most lenders want a two-year self-employment history, though one year can work when the borrower shows a two-year track record in the same line of work. Reserves are higher than for a salaried borrower, commonly six to twelve months of mortgage payments held in savings. And documentation is heavier, typically two years of personal and business returns, a year-to-date profit and loss, business bank statements, and a CPA letter confirming the business is active.

Bank statement loans are the fallback. They qualify a borrower on deposits rather than tax returns, which solves the write-off problem outright. They also carry higher rates and usually larger down payments, so they are a tool for a specific situation rather than a default.

If you are buying on Staten Island, here is what is different

Staten Island is overwhelmingly one-family and two-family houses with conventional and FHA financing, which means self-employed buyers here run into the standard underwriting questions and not much else. There is no board. Nobody is going to ask you to justify your business model to a committee. The practical Staten Island issues are the debt-to-income calculation and the two-family rent question.

The two-family point is worth spelling out. On a Staten Island two-family, the projected rent from the second unit can be applied toward qualifying income under lender rules, which for a self-employed buyer with heavily deducted returns can be the piece that closes the DTI gap. It is also the piece most commonly left out of a pre-approval because the buyer did not tell the loan officer they were open to a two-family. Joseph Ranola raises it at the first meeting.

The second Staten Island item is timing. With a borough median sale price around $734,000 as of June 2026 and a market that moves quickly on well-priced inventory, a self-employed buyer cannot start assembling two years of returns after finding a house. The document package has to be complete before the search starts, or the offer will lose to a W-2 buyer with a cleaner file.

If you are buying in Brooklyn, here is what is different

Brooklyn adds a second decision-maker that Staten Island does not have: the co-op board. A co-op board is not bound by lender underwriting standards and routinely applies its own, stricter ones. Many Brooklyn co-op boards want to see post-closing liquidity of one to two years of maintenance and mortgage payments, and many are openly skeptical of variable self-employed income in a way no lender is. A self-employed buyer can be fully approved by a bank and still be turned down by a board, with no reason given and no appeal.

That changes strategy rather than eligibility. For a self-employed Brooklyn buyer, condos and one-to-four-family houses carry materially less approval risk than co-ops, and the board package for a co-op needs to be built as a persuasion document with a clean P&L, a CPA letter, and visible reserves, not as a pile of returns. With the Brooklyn median around $1.04 million, the liquidity expectation is a larger absolute number here than anywhere on Staten Island.

The multi-family angle works in Brooklyn too, and works harder. In a neighborhood like East Flatbush, where the median runs in the $755,000 to $805,000 band, a self-employed buyer purchasing a two-family or three-family gets both the rental income toward qualifying and a payment that a variable income can actually absorb in a slow quarter.

Can I get a mortgage if I am self-employed in Staten Island or Brooklyn?

Yes. Self-employed buyers get mortgages in Staten Island and Brooklyn every week. Lenders typically want two years of tax returns, average the net income across 24 months, and require heavier reserves, commonly six to twelve months of payments. Effective June 3, 2026, Freddie Mac removed the requirement to use the lesser of the new business income or the prior occupation income for borrowers with under two years of self-employment, which helps buyers who left a salaried job for a more profitable business. Talk through your specific file with Joseph.

How do lenders calculate income for a self-employed borrower?

Lenders use net income, not gross revenue. They take the bottom line from your Schedule C, K-1, or corporate return after deductions, add the last two years together, and divide by 24 to produce a qualifying monthly income. This means the write-offs that reduce your tax bill also reduce the income a lender will lend against, dollar for dollar. If you plan to buy within eighteen months, raise that trade-off with your accountant before you file.

Do I need two years of tax returns to buy a house?

Usually yes, but not always. Most lenders want a two-year self-employment history. One year can be enough when you can show a two-year track record in the same line of work, and as of June 3, 2026 Freddie Mac no longer forces the lender to use the lesser of the new business income and your prior salary. A bank statement loan, which qualifies you on deposits rather than returns, is the fallback when the returns will not support the number, at a higher rate and usually a larger down payment.

Is it harder to buy a Brooklyn co-op if I am self-employed?

Yes, meaningfully harder than a condo or a house. A co-op board sets its own standards and is not bound by lender underwriting, and many Brooklyn boards want one to two years of post-closing liquidity and are skeptical of variable income. You can be fully bank-approved and still be rejected by a board with no reason given. For self-employed buyers, condos and one-to-four-family houses carry materially less approval risk, and a co-op board package needs to be built as a persuasion document. See the Brooklyn buying guide.

What documents should a self-employed buyer have ready before house hunting?

Two years of personal and business tax returns, a year-to-date profit and loss statement, two to three months of business and personal bank statements, a CPA letter confirming the business is active, proof of reserves, and a full pre-approval from a loan officer who has already reviewed all of it. Assemble the package before the search starts. On Staten Island, where the median sale price ran near $734,000 in June 2026 and good inventory moves fast, a self-employed offer with an incomplete file loses to a W-2 buyer with a clean one. See how offers get evaluated.

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