Mortgage When You Work For A Family Business
Pay from a business your family owns can count as regular income. You need to show you are not an owner, or on Fannie Mae, that you own less than 25%.
What you need to qualify
Each item below is a requirement of Fannie Mae, FHA, or at least one other program we offer.
- On FHA, official business documents showing ownership percentages, or a letter from a certified public accountant, proving you are not an owner.
- On FHA, signed personal tax returns or tax transcripts.
- On Fannie Mae, at least 12 months working for the business before your application date.
- On Fannie Mae, your most recent signed tax returns showing you own less than 25% of the business.
- On Fannie Mae, qualifying income consistent with last year’s earnings on a W-2 or tax returns.
- On at least one jumbo program, two years of signed personal tax returns and a written verification of employment showing ownership percentage.
Family pay can count
Proof you are not an owner
Under 25% on Fannie Mae
Twelve months on the job
Tax returns required
Some options are limited
Can Income From A Family Business Qualify
Yes. FHA counts pay from a business your family owns when you are not an owner.
FHA defines family-owned business income as pay earned from a business owned by your family in which you are not an owner. The lender verifies that with official business documents, such as corporate resolutions, business tax returns, or a Schedule K-1, or with a letter from a certified public accountant, plus your signed personal tax returns or transcripts.
Fannie Mae applies similar rules when you work for a family member. You need at least 12 months with the business, and your tax returns must show you own less than 25%. Own 25% or more and you are qualified as self-employed instead. Own a bigger share? See our self-employed home loan page.
The same Fannie Mae rules apply if you work for an interested party to the home sale, such as the seller, builder, developer, or real estate agent. Some options are off the table: FHA will not count expected future income from a family-owned business, and Fannie Mae will not count a future pay raise when you are employed by a family member.
Why choose Saxton when you work for a family business
For borrowers who work for a business their family owns and want that paycheck counted.
Family Pay Can Count
FHA counts pay from a family-owned business as income when you are not an owner of the business.
Proof You Are Not An Owner
On FHA, business documents showing ownership percentages or a letter from a certified public accountant on business letterhead can show you are not an owner.
Under 25% On Fannie Mae
On Fannie Mae, your tax returns must show less than 25% ownership. At 25% or more, you are qualified as self-employed.
Twelve Months On The Job
Fannie Mae needs at least 12 months working for the business before your application date.
Tax Returns Required
FHA needs signed personal tax returns or tax transcripts, and at least one jumbo program needs two years of signed personal tax returns.
Some Options Are Limited
At least one jumbo program uses a two-year average of your W-2 pay, and the lower year if earnings dropped, and FHA will not count expected income from a family-owned business.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about using family business income for a home loan.
Yes. FHA counts that pay when you are not an owner, and Fannie Mae counts it with 12 months on the job and less than 25% ownership.
On FHA, with official business documents showing ownership percentages, such as corporate resolutions, business tax returns, or a Schedule K-1, or with a letter from a certified public accountant on business letterhead.
On Fannie Mae, less than 25% ownership is fine, but 25% or more means you are qualified as self-employed. On FHA, this income type is for borrowers who are not owners.
Usually. FHA needs signed personal tax returns or tax transcripts, and Fannie Mae generally needs your most recent signed federal tax returns.
On Fannie Mae, at least 12 months before your application date. At least one VA program will consider the income when at least 12 months of it is reported on a current tax return.
Not on at least one conventional program. A job that starts after closing counts only when you are not employed by a family member.
Not on Fannie Mae, which will not count a future pay raise when you are employed by a family member. FHA also will not count expected income from a family-owned business.
Find out what you qualify for
Tell us about the family business you work for and what you want to buy, and we will show you the programs that fit.
Get Pre-Qualified- Fannie Mae, Selling Guide B3-3.5-01, underwriting factors and documentation for a self-employed borrower
- Consumer Financial Protection Bureau, what is the ability-to-repay rule?
Loan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Draw requirements and variable rate terms apply. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.