Almost all loans fall into two categories: Government and conventional. Government loans are further subdivided into either VA (Veteran Administration) loans for our active and inactive military looking to buy an owner-occupied property and FHA (Federal Housing Administration) loans which are open to all people looking to purchase an owner-occupied residence. Conventional (Fannie Mae & Freddie Mac) loans, like FHA loans, are open to all people as well but offer many more types of loan structures including those looking to buy second homes and investment properties.
What most people don’t know is that lenders choose to offer all three types of loans and often times impose their own guidelines on top of the base guidelines. For example, for forever it’s been a lender loan guideline to provide two years of tax returns for anyone applying for a home loan. But did you know that Freddie Mac only requires 1 year of tax returns? That means the one thing all self employed people need to know is that if you’ve only been in business for one year you can apply for a home loan. This is great news for anyone who has made the leap from their salaried job to being self employed and thinks they can’t buy a home until they’ve been in business for two years. Or for anyone who wants to start that side business now to boost their home purchase power next year.