Guideline answers · Freddie Mac

Freddie Mac · Income

How long does a borrower need to be self-employed for a Freddie Mac loan?

Usually two years. Less than two years can work when the borrower has a combined two-year history in the business and a prior job in the same or a similar field, the lender documents why the income is stable, and the returns show at least one year of self-employment income. One year of returns is enough when the borrower has owned 25% or more of the same business for at least five years.

Checked against the sources below on October 29, 2026. Reviewed by Chris Black, NMLS 275073, on November 2, 2026.

The rules

• Self-employed means an ownership interest of 25% or more.
• Standard: a two-year history of current self-employment, in most cases.
• Less than two years: evaluate the borrower's experience in the business, document a combined two-year history from the business and a prior job in the same or similar occupation or industry, put a written stability analysis in the file, and consider risk layering.
• The tax returns must reflect at least one year of self-employment income.
• Business in existence five years or more (and the borrower self-employed in it five years): signed personal returns, and the business returns with K-1s where they apply, for the most recent year.
• Business under five years: the same returns for the most recent two years.

Watch for

• The one-year return table applies at the Streamlined Accept and Standard documentation levels.
• Freddie Mac's automated income assessment (Section 5304.2) has its own requirements.

Sources

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