Self-employed buyers often have the income to qualify for an FHA loan but struggle to document it the way underwriters expect. Two years of tax returns full of legitimate deductions can make a profitable business look smaller on paper, and the broker you pick determines how well that gap gets explained. For anyone searching for the right mortgage broker for self-employed FHA borrowers, the answer is to choose by criteria rather than by claim. The seven checks below work on any broker, including Duane Buziak, so you can compare options on the same terms. Regulatory figures are verified as of October 2026 and linked to their sources.
1. Confirm the Broker Documents Self-Employment Income the FHA Way
FHA underwriting follows HUD Handbook 4000.1. For sole proprietors, 1099 contractors, and LLC owners, it generally looks at a two-year history of self-employment and converts it into net qualifying income: the profit left after business expenses, adjusted for specific add-backs, divided into a monthly figure. That is why the idea that FHA ignores tax returns is wrong. The returns are the main evidence.
Suppose a freelance designer reported $54,000 net profit last year and $66,000 the year before. Combined, that is $120,000 over 24 months, or $5,000 per month before add-backs. If income had been falling instead of rising, underwriters would typically be more conservative and lean toward the lower, recent figure.
To put this into practice:
- Gather two years of personal and business returns, a year-to-date profit and loss statement, and your business license.
- Ask the broker to run the calculation on your actual numbers, not a generic example.
- Ask for the result in writing as an income worksheet.
- Rebuild the math yourself from the same documents.
The common mistake is assuming gross revenue counts. A business that grossed $200,000 but netted $54,000 qualifies on the $54,000. What to measure: a written worksheet you can reproduce line by line. If a broker will not show the arithmetic, treat that as a warning sign. For a deeper walkthrough of the paperwork side, see this step-by-step guide to self-employed income verification.
2. Choose a Broker Who Understands Tax Write-Offs and Add-Backs
Write-offs matter more than most self-employed buyers expect. Every deduction lowers taxable profit, and taxable profit is the starting point for qualifying income. Add-backs are the deductions underwriters may add back because they are non-cash or non-recurring, with depreciation the most common. Other items, such as certain meal deductions, may work against you, so the details matter.
Here is how an add-back changes the earlier illustration. If the designer claimed $6,000 of depreciation in each of the two years, that adds $12,000 back across 24 months. Average monthly income moves from $5,000 to $5,500, a $500 monthly difference that can change how much home fits in the budget.
- List every Schedule C deduction with your tax preparer, line by line.
- Flag depreciation, business use of home, and one-time or non-recurring items.
- Ask the broker to confirm which are treated as add-backs under Handbook 4000.1.
- Ask which deductions reduce qualifying income and by how much.
The costly mistake is filing with unusually heavy deductions the year before applying, without checking the effect on qualifying income. A smaller tax bill can mean a smaller loan approval. Talk to a broker before filing if a purchase is on the horizon. Borrowers exploring stated income mortgage alternatives will find that FHA’s documentation-based approach looks quite different.
What to measure: compare the broker’s qualifying monthly income with your own estimate. Any gap should be explained line by line, not waved away. Duane Buziak works through these deductions with self-employed FHA buyers, and you can start at fhamortgages.net to see what documentation to prepare.
3. Look for Access to Hundreds of Wholesale Lenders and Overlay Knowledge
FHA is government-insured, but not every company underwrites it identically. An overlay is a company’s own rule layered on top of FHA minimums, such as a higher credit score floor, extra reserves, or a stricter profit and loss requirement. A broker with access to hundreds of wholesale lenders can send your file to the one whose overlays fit your profile, while a single-shelf retail company can only use its own. That is the core advantage of working with a broker who has access to multiple FHA lenders.
For example, imagine a borrower whose income dipped for three months. One lender requires extra reserves to proceed. Another accepts a year-to-date profit and loss to show the business recovering. A broker who knows both can place the file with the second.
The comparison below shows the structural difference. It describes business models in general, not any named company.
| Factor | Independent broker with wholesale access | Single-shelf retail lender |
|---|---|---|
| Programs and overlays | Can match the file to the lender whose rules fit | One set of rules for every borrower |
| If your file is declined | Can re-route to another wholesale lender | Typically ends with that company |
| Pricing | Can compare wholesale pricing across lenders | One rate sheet |
| Self-employed fit | Placement can follow income type and history | Depends on that company’s overlays |
| Compensation | Disclosed on the Loan Estimate | Disclosed on the Loan Estimate |
Ask the broker which overlays affect self-employed files and how they choose a lender for each situation. The mistake is assuming FHA rules are identical everywhere. What to measure: how many workable options you are shown, and the stated reasons for excluding the others. If you are weighing the models directly, this comparison of an FHA mortgage broker vs. a direct lender lays out the tradeoffs.
4. Use a Soft Pull Pre-Approval Before Any Hard Inquiry
A soft pull lets a broker view your credit without a hard inquiry, so it does not affect your score the way a formal credit application can. With NoTouch Credit Pull, Duane Buziak offers a soft pull mortgage review, a no hard inquiry mortgage pre-approval step where you see realistic scenarios first. It is a way to get a mortgage pre-approval without a hard pull while you are still deciding on a program and a broker.
Imagine a buyer who compares three scenarios: FHA with a recent profit and loss, FHA on a straight two-year average, and a larger down payment. The buyer sees the price ranges, picks one, and only then authorizes a hard pull.
- Request a no hard inquiry mortgage pre-approval review and share income documents.
- Ask for the scenarios and the price range for each in writing.
- Settle on income treatment and program.
- Authorize the hard pull only after that.
The common mistake is assuming a soft pull replaces the credit report required later. It does not. A full report is still needed before a loan can be underwritten. The soft step simply moves the hard inquiry to the point where you are committed. The CFPB’s homebuying guidance also covers how mortgage inquiries are treated when you shop, and multiple mortgage inquiries within a short window are generally scored as one. What to measure: whether you had a clear scenario and price range before any hard inquiry happened.
5. Test the Broker’s Plan for Credit Scores and DTI
Credit score tiers set your minimum down payment under FHA, and debt-to-income (DTI) ratio shapes how much you can borrow. Self-employed files add a wrinkle: business debts may or may not count against you, depending on who pays them and what the documents show. A broker should explain this before you apply, not after.
| Credit score | Minimum down payment | On a roughly $311,000 home |
|---|---|---|
| 580 and above | 3.5% | $10,885 |
| 500 to 579 | 10% | $31,100 |
Those tiers come from Handbook 4000.1. A 590 borrower qualifies for 3.5% down, while a 560 borrower would need 10%, a difference of $20,215 in cash on this price. Individual companies may set higher minimums through overlays, which ties back to strategy 3. Buyers with thinner credit can review strategies for finding a broker for FHA loans with bad credit. The comparison below shows where FHA’s flexibility helps.
| Feature | FHA | Conventional (for comparison) |
|---|---|---|
| Score for lowest down payment | 580 for 3.5% down | Commonly 620 or higher |
| Score range with a path | 500 to 579 with 10% down | Generally no path below 620 |
| Self-employment history | Two-year guidance in Handbook 4000.1 | Similar two-year expectation |
Ask for a pre-application checklist covering a score target, debts to pay down, and how business debts are treated. The mistake to avoid is paying off or opening accounts right before applying without advice, which can shift scores or change the DTI math in unexpected ways. Soft-pull review through NoTouch Credit Pull lets the broker see your profile before any of those moves. For score-building tactics, see these tools to improve your credit score before FHA approval.
What to measure: your score and DTI before and after the broker’s action plan.
6. Run the Full Cost Math, Not Just the Rate
A low rate with high mortgage insurance and fees can cost more each month than a slightly higher rate with lower costs. FHA has two insurance charges. UFMIP, the upfront mortgage insurance premium, is 1.75% of the base loan under HUD Mortgagee Letter 2015-01 and is usually financed. Annual MIP is charged yearly and collected monthly, and it varies by tier. The full rule set is covered in this guide to FHA mortgage insurance requirements.
| Base loan (30-year term) | LTV 90% or less | LTV over 90% to 95% | LTV over 95% |
|---|---|---|---|
| $726,200 or less | 0.50% | 0.50% | 0.55% |
| Over $726,200 | 0.70% | 0.70% | 0.75% |
Rates reflect ML 2023-05 and Handbook 4000.1, verified as of October 2026. One-unit FHA loan limits for 2026 run from a floor of $541,287 to a ceiling of $1,249,125 under HUD ML 2025-23, depending on the county.
A worked example
Illustration: a $300,000 base loan on a home of about $311,000 with 3.5% down. UFMIP is $5,250, financed to a $305,250 loan. At an assumed 6.50% rate for 30 years (an illustration, not a quote), principal and interest is about $1,929 per month. Annual MIP at the 0.55% tier is about $1,650 per year, or $137.50 per month. Henrico County property tax at $0.85 per $100 (henrico.us, verified as of October 2026) on $311,000 is $2,643.50 per year, or $220.29 per month. Add an assumed $100 monthly for homeowners insurance:
- Principal and interest: $1,929
- Annual MIP: $138
- Property tax: $220
- Insurance: $100
- Total: about $2,387 per month
To compare brokers, request a Loan Estimate from each and line the figures up item by item. That is the Dare to Compare approach: same loan, same date, side by side. The mistake is comparing only interest rates. What to measure: total monthly payment and cash to close on matching Loan Estimates. Duane Buziak also offers no-out-of-pocket closing options on some files, so ask each broker whether those apply to you. When you are ready to shop pricing, these tips for shopping for the best mortgage rates and this walkthrough on getting the best FHA mortgage rates as a self-employed borrower can help.
7. Check Licensing, Independence, and Multi-State Coverage
A broker can only help you in states where they are licensed, and reviews cannot substitute for that check. NMLS Consumer Access is the free public database where you can search any broker’s NMLS number, see state licenses, and review employment history and any regulatory actions.
For example, imagine a buyer in Tennessee. Before sending tax returns, that buyer searches the broker’s NMLS number and confirms an active Tennessee license. The same step applies in Virginia, Florida, Georgia, Washington DC, or any other state where you are buying. Duane Buziak’s NMLS number is 1110647, and the licensing listed there should be your reference for each state, including North Carolina, South Carolina, and Maryland, so confirm there before sharing documents.
- Search the broker’s NMLS number on NMLS Consumer Access.
- Confirm an active license in the state where the property sits.
- Ask how the broker is paid and where that appears on the Loan Estimate.
- Ask whether the broker can shop multiple wholesale lenders for your file.
The common mistake is skipping the license check because the broker has strong online reviews. What to measure: a confirmed active license in your state and a disclosed compensation structure. For a broader framework on vetting candidates, see these strategies for choosing the right FHA mortgage broker.
Eight Questions Self-Employed Buyers Ask About FHA Brokers
What should I look for in a mortgage broker for self-employed FHA borrowers?
Look for a broker who shows how they calculate income from your returns, understands add-backs, has access to hundreds of wholesale lenders, offers a soft pull review, and holds an active license in your state.
How many years of tax returns does FHA require for self-employed borrowers?
FHA guidance in Handbook 4000.1 generally looks at a two-year self-employment history, with personal and business returns and often a year-to-date profit and loss.
Do business write-offs lower my FHA qualifying income?
Yes. Qualifying income starts from net profit, so deductions reduce it. Certain items such as depreciation may be added back, which a knowledgeable broker will identify.
Does FHA ignore tax returns for self-employed buyers?
No. Returns are the primary evidence of income, and underwriters use them to calculate net qualifying income.
What is a soft pull mortgage pre-approval?
It is a no hard inquiry mortgage pre-approval step. With NoTouch Credit Pull, Duane Buziak reviews your profile without a hard inquiry, and a full credit report is pulled later once you commit.
Does shopping for a mortgage hurt my credit score?
Not necessarily. Mortgage inquiries made within a short window are generally treated as a single inquiry for scoring, and the CFPB offers guidance on shopping. A soft pull review lets you compare before any hard inquiry.
What credit score do I need for an FHA loan if I am self-employed?
A 580 score qualifies for 3.5% down under Handbook 4000.1, and scores of 500 to 579 generally require 10% down. Some companies apply higher minimums through overlays.
Is Duane Buziak a legitimate mortgage broker?
Yes. Duane Buziak is a mortgage broker, not a lender, and his NMLS number 1110647 can be verified on NMLS Consumer Access.
Where to Start and How the Seven Checks Combine
Start with income documentation (strategies 1 and 2) and the soft pull review (strategy 4), because they show quickly whether a file is workable and cost you nothing in credit impact. Then use the cost math and matching Loan Estimates from strategy 6 to choose, and verify licensing before you send documents.
Ready to take the first step toward homeownership with an FHA loan tailored to your needs? Schedule your free consultation today and discover how Duane Buziak, an award-winning broker with FHA Mortgages by Duane Buziak, can guide you with competitive rates and expert guidance, hundreds of wholesale lenders, NoTouch Credit Pull, and Dare to Compare pricing. Call 804-212-8663 or visit 4860 Cox Rd, Glen Allen, VA 23060. You can also check credentials any time on NMLS Consumer Access.
