Professional services mortgage for the people whose income doesn't fit a W-2 box.

Fannie Mae and Freddie Mac standardly require two years of self-employment history for sole proprietors and partners. There are exceptions: if you have a prior W-2 history in the same field (e.g., associate-to-partner at a law firm with two years total tenure), some lenders treat the W-2 years as occupational continuity. Below the two-year threshold, the Non-QM bank-statement program qualifies on 12 months of deposits with no business-tax-return requirement.

Under Fannie Mae Selling Guide B3-3.4-02, ordinary income, guaranteed payments, and recurring distributions from a partnership or S-corp K-1 count as qualifying income when supported by a two-year history. Capital gains and one-time distributions do not. The K-1 review also looks at the entity’s overall financial health (Form 1065 or 1120-S retained earnings) to confirm the distributions are sustainable.

No, and you don’t have to. We use both your W-2 from the S-corp and the distributions reported on Schedule K-1 of Form 1120-S. With a two-year history of both, both count. This is the right answer for most CPA, attorney, and consultant S-corp setups.

Yes. Fannie Mae allows specific Schedule C add-backs to net profit for qualifying-income calculation: depreciation (Line 13), depletion (Line 12), amortization (where reported), and business-use-of-home expense (when documented separately). These are non-cash deductions that reduce taxable income but not actual income. Most generalist lenders skip them. We don’t.

Yes, with timing care. The mortgage application should reflect your post-buy-in income; the partnership’s offer letter and the buy-in financing terms become part of the file. If the buy-in note is being paid from your share of distributions, the lender will treat the note payment as a debt obligation in DTI calculation. Cleaner option: close the personal mortgage before or well after the partnership buy-in to avoid concurrent-debt complications. We’ve done both.

SBA 7(a) and 504 loans finance practice acquisitions; conventional and Non-QM finance personal residences. They’re separate underwriting tracks. If both are happening in the same 12-month window, sequencing matters: typically the practice acquisition first (because its income contribution gets the seller-finance season required to count toward your personal mortgage income), then the personal mortgage. We coordinate with the practice broker and the SBA lender to time it correctly.

Depends on the program. Under Fannie Mae and Freddie Mac, the tax return rules — you qualify on Schedule C net profit (after allowed add-backs) and the deposit story is irrelevant. Under the Non-QM bank-statement program, deposits rule — we use 12 or 24 months of personal or business bank statements as the income basis, with the tax return playing a confirming role. We pick the program by which story your file tells more strongly.

You can. Most can’t. The most common reasons mortgage brokers struggle with their own loan are (1) commission income with no two-year average that smooths the variance, (2) S-corp structure where the W-2 looks tiny, (3) AUS (automated underwriting) returning a higher reserves or DTI flag because of the self-employment classification. Working with another broker (us) gives you a clean second set of eyes on the file and access to lender relationships that don’t conflict with your originating shop.

Asset-depletion treats your liquid investment assets as an implied income stream by dividing the portfolio value by a fixed term (typically 84 to 360 months depending on the program). If you have $2M in taxable brokerage and $400K in retirement, an asset-depletion program might credit you with $25K–$30K of monthly qualifying income on top of (or instead of) earned income. It’s the right program for senior partners winding down, business sellers between exits, and high-net-worth low-recent-W-2 borrowers.

Conventional Fannie Mae and Freddie Mac (when tax returns plus add-backs hit the qualifying number), Non-QM bank-statement (the most common path for high-distribution S-corp owners and bank-rich Schedule C filers), Non-QM 1099-only, Asset-Depletion (for high-net-worth low-W-2 borrowers), Jumbo (for purchase price over $806,500 in most Florida counties), and SBA-coordinated personal-mortgage timing (for clients acquiring practices). We pick the program after we read your file, not before.