Self-Employed Mortgage Options Explained: Rates, Requirements, and Costs

Side-by-Side Comparison

Every cell carries a number or an explicit "none"; where no figure exists in the sources used here, the cell says so rather than guessing.

The interest rate is what accrues on your balance and sets the principal-and-interest payment. The APR folds lender fees and points into a single annualised cost figure, which is why Griffin Funding's 6.625% rate carries a 6.91% APR — the gap is the cost of the fees, not a second rate.

Closing costs are not in this table because they are set by state and metro practice (transfer taxes, title and settlement customs, recording fees) and no sourced local range is cited here. Ask for a Loan Estimate from each lender and compare page 2 line by line.

How They Compare

• 620–639 score, 5% down, staying put 10+ years: conventional beats FHA on insurance structure. FHA adds a 1.75% upfront premium — $5,250 on a $300,000 loan, usually financed into the balance (Chase, undated) — plus an annual premium paid monthly. Conventional charges no upfront premium and PMI is cancellable (Fairway Independent Mortgage, undated; The Lenders Network, undated). At a 620–639 score and 5% down on a $300,000 30-year loan, PMI quoted at 1.24% a year is about $3,720 a year, or roughly $310 a month, until it cancels (HomeCalcHub, undated).
• Same borrower with more cash: every 5 points of down payment cuts the PMI rate. At a 620–639 score, quoted PMI falls from 1.24% at 5% down to 0.84% at 10% and 0.54% at 15% (HomeCalcHub, undated). On that same $300,000 30-year loan, the 5%-to-15% move is 0.70 percentage points, about $2,100 a year in premium.
• Score under 580: FHA is the only one of these four that quotes a path. FHA allows 500–579 with 10% down (Bankrate, undated), while conventional needs 620 (The Mortgage Reports, undated) and bank statement lenders typically need 620 (X2 Mortgage, undated). The trade is 6.5 percentage points more cash than FHA's 3.5% minimum at 580+.
• Eligible military borrower with little cash: VA wins on both cash and insurance. Zero down versus conventional's 3% minimum is $9,000 on a $300,000 purchase price, and VA requires no monthly mortgage insurance (Freedom Mortgage, undated; The Mortgage Reports, undated). VA's DTI is shown up to 41% (Bankrate, undated), so a borrower whose Schedule C income leaves them above that may need the FHA route instead, where 43% is the general limit (Chase, undated).
• Self-employed with heavy write-offs or declining taxable income: bank statement loan, at a price. It needs 10% down and a 620 score (Truss Financial Group, undated), and one lender quotes 6.625%–7.125% rates (6.91%–7.238% APRs) depending on credit, down payment, loan size and buydown points (Griffin Funding, undated). Non-QM pricing generally sits above QM pricing in both rate and fees (JVM Lending, undated), so this is the option for borrowers whose returns will not support the loan, not a default choice.
• Five-plus years in the same business with rising income: stay conventional and you may skip the business returns. Fannie Mae's base rule is two years of signed personal returns with all schedules, plus two years of business returns at 25%+ ownership (Fannie Mae, 2018-12). A lender may waive the business returns if you have had 25%+ ownership of the same business for at least five years, use personal funds for down payment, closing and reserves, and show increasing self-employment income across the last two individual returns (Fannie Mae, 2018-12).
• First-time buyer at 3% down, score 620–659: Conventional 97% LTV, not Home Possible. Home Possible requires a 660 minimum — 40 points higher — making it unavailable at 620–659 (The Lenders Network, undated). Conventional 97 Standard 97% LTV requires at least one first-time buyer (no ownership in the prior three years) and homebuyer education, and carries no income limits (The Lenders Network, undated).

Who Should Choose Which

• Sole proprietor, 5 years in the same business with 25%+ ownership and rising income on the last two returns, 10% down, 700 score — conventional, with a possible waiver of the business tax returns (Fannie Mae, 2018-12); PMI at 10% down is quoted near 0.84% a year for a 620–639 score and lower above that band (HomeCalcHub, undated).
• First-time buyer, no ownership in the prior three years, 3% down, 640 score, willing to complete homebuyer education — Conventional 97 Standard 97% LTV, which has no income limits (The Lenders Network, undated).
• Buyer with a 660+ score, 3% down and income inside program limits — Freddie Mac Home Possible, the only one of the four 3%-down programs compared that sets a 660 floor (The Lenders Network, undated).
• Self-employed borrower with a 545 credit score and 10% down saved — FHA, the only route here open between 500 and 579, and only at 10% down (Bankrate, undated).
• Self-employed borrower, 590 score, 3.5% down, DTI at 45% — FHA, where 43% is the general ceiling but higher ratios are allowed by some lenders with added qualifications, and one comparison shows up to 50% (Chase, undated; Bankrate, undated).
• Eligible member of the military community with no down payment saved and a 640 score — VA: 0% down, no monthly mortgage insurance, DTI shown up to 41% (Freedom Mortgage, undated; Bankrate, undated).
• Contractor whose two years of returns show large deductions and falling net income, 15% down available, 720 score — bank statement loan, accepting the higher non-QM rate and fee structure (JVM Lending, undated), with rates quoted at 6.625%–7.125% (6.91%–7.238% APR) by one lender (Griffin Funding, undated).
• Borrower under 620 with no VA eligibility and only 5% down — none of these four fits today; FHA opens at 580 for 3.5% down (Bankrate, undated), so the next step is credit repair rather than a product switch.

These are starting points, not underwriting decisions. A licensed loan officer reviewing your actual returns, and a tax professional on how your write-offs affect qualifying income, should sign off before you make an offer.

Frequently asked questions

Sources

1. Fannie Mae — Underwriting Factors and Documentation for a Self-Employed Borrower (B3-3.2-01) (2018-12)
2. Enact (formerly Genworth MI), citing Fannie Mae 2021 Selling Guide — Self-Employed Borrower: Form 1084 Part I – The Personal Tax Returns (2021-08)
3. Bankrate — How Much Is An FHA Loan Down Payment?
4. Chase — Minimum Credit Score for FHA Loan
5. Bankrate — FHA loans vs. VA loans
6. The Mortgage Reports — Conventional Loan Requirements 2026 | First-Time Home Buyer
7. The Lenders Network — Conventional 97 Loan: 3% Down Payment Program (2026 Requirements)
8. HomeCalcHub — Conventional Loan Calculator: Payment, PMI & Down Payment
9. Freedom Mortgage — VA Loans Explained: What They Are and How They Work
10. X2 Mortgage — Bank Statement Loans: A Guide for Self-Employed Borrowers
11. Truss Financial Group — Bank Statement Loans Guide 2026
12. Griffin Funding — Bank Statement Loans: Rates for Self-Employed
13. JVM Lending — Non-QM
14. Fairway Independent Mortgage — Conventional Loan Down Payment: How Much Do You Need?