Last Updated on August 27, 2023 by Eric Jeanette

1 Year Tax Return Mortgage

1 Year Tax Return Mortgage

Can You Get a Mortgage with Only 1 Tax Return?

It’s widely believed that you must have 2 years of tax returns in order to get a mortgage.  While this is certainly the case with the majority of mortgage lenders, there are many others who will lend to a qualifying borrower with only 1 tax return (for the most recent year).  We also work closely with many mortgage companies who do not require any tax returns, and let you use your bank statements to qualify for a mortgage.

Using only 1 year of tax returns is helpful for many, especially those who are newly self-employed.  In order to be eligible with most lenders to only use one year of self employment income, is if you previously worked in the same industry and in a similar field.

If you previously were employed in a different line of work, this may disqualify you from a 1 year tax return mortgage.  It is also important that your income is either around the same, or higher than it was before becoming self-employed.  Mortgage lenders will be looking at the stability of your income, and the likelihood of it will either continue or increase with time.

Top 1 Year Tax Return Mortgage Lenders of 2023

Below are some of the best mortgage lenders for newly self employed mortgage applicants.  We would be glad to help you find a mortgage lender that will allow you to use only your most recent year of income.  If you fill out our contact form requesting more information, we will help match you narrow down your search to see who may  offer you the best option based on your location, and personal situation.

1 – Dream Home Financing  Contact

2 – Impac Mortgage  Contact

3 – Northstar Funding  Contact

4 – New American Funding  Contact

5 – Hurst Lending  Contact

6 – Mortgage Depot  Contact

7 – Fidelity Home Group  Contact

8 – Acra Lending  Contact

The above examples are a small sample of mortgage companies that offer options to qualify for a home loan with only 1 tax return.  Contact us to learn what lenders in your state offer these programs. click to speak with someone to discuss your options.

One Year Tax Return Mortgage Options

You will have various one year tax return mortgage options regardless if you are purchasing or refinancing a home. Some of the options are better than others when it comes to the down payment requirement and interest rate.

FHA Loan with One Year of Tax Returns – When you read the FHA guidelines, you will see that tax returns are required. However, when borrowers have a strong file, the tax returns may not be required.

A strong file is one where the credit scores are very good, the debt to income ratio is low, and there are adequate payment reserves available post closing. When this happens, the automated underwriting findings often may not require the borrower to provide tax returns.

These loans are offered with just 3.5% down and the interest rates will be extremely competitive.

Alternative Mortgage Programs – Individuals who simply cannot provide more than one year of tax returns have other options. This would include people who have not filed for two years, or who do not have enough income documented on their tax returns for two years.

The alternative program that may fit you would likely require a larger down payment of 10-25%. The interest rates will also be a few points higher than a conventional or FHA loan.

Mortgage for Self Employed Less than 1 Year

If you have a new business or you have been self employed for less than 1 year, you may still have an opportunity to get a mortgage. While most lenders will require you to have been self employed for at least two years with tax returns to support the income, there are other options for you.

One of the programs that can help people find a mortgage for self employed less than 1 year is the stated income loan. With this mortgage, you will simply state what your income is and the lender will not check up on how long you have been in business and also will not require tax returns. Contact us to learn more.

Read more about getting a mortgage when self employed for less than one year.

Can You Buy a House with No Tax Returns?

There are options for you to buy a house without tax returns. The best program to accomplish this if you are eligible is the FHA loan.  If you have good credit and a strong application, the automated underwriting system may issue an approval without having to provide tax returns. In this situation, you would only supply copies of your W2s.  If this option may work for you, then we can help.

If you are self employed, then there are other options for you to get approved by providing bank statements. Read more about bank statement loans.

Case Study1 Year Tax Return Mortgage

James was a 1099 employee and wrote off so many business expenses that he showed very little income on his tax returns. 14 months ago, he found a job in the same industry that paid him via W2.

When James spoke to the loan officer at the local bank, they could not help and he was told he needed two years of tax returns with enough income to qualify.

He then spoke with a mortgage broker who had many different options available. The loan officer at the brokerage suggested a non QM mortgage product that only required the most recent year’s tax returns.

James was able to purchase the home with a 15% down payment. The interest rate was a little higher but he was able to purchase the home that he wanted and he can refinance to a conventional mortgage in another year.

Frequently Asked Questions


How Many Years of Tax Returns for a Mortgage?

You can get a mortgage without tax returns at all when applying for an FHA loan. The automated underwriting findings will let the loan officer know if tax returns are required. However, that options is available for W2 wage earners. If you are self employed, you will need to provide two years of tax returns.

When applying for some of the creative mortgage programs that we discussed such as bank statement loans or stated income loans, no tax returns are required.

Must I use a particular type of lender for a one year tax return mortgage program?

Yes, many mortgage companies will only have options that will require you to use 2 years of tax returns. You need to either use a portfolio lender, or a mortgage company that uses the Freddie Mac automated underwriting system (Loan Prospector), that often will approve an applicant to only use their most recent year of income (1 tax return).  Keep in mind, the underwriting software that Fannie Mae uses is much less likely to provide a loan approval requiring only 1 tax return.

What is the highest DTI ratio allowed when applying with one year of tax returns?

You should expect most lenders to require your DTI ratio to be no greater than 43%. However, some portfolio lenders, and other private mortgage lenders, may allow up to a 50% DTI.

Can you get a FHA loan using only 1 year of income?

The FHA guidelines require that you use your 2 most recent years of tax returns or the most recent two years of W2s. However, if the automated underwriting findings do not ask for tax returns, then you may not have to provide them.

Are there any refinance programs that allow you to use only 1 year of income?

Yes, there are refinancing options that allow you qualify with only 1 tax return. This includes both rate and term refinancing, as well as cash out refinancing.

Can you be a first time home buyer and qualify for a 1 year tax return mortgage?

Yes, you may be a first time home buyer. The possibility of qualifying for a mortgage using only 1 year of income is not limited to repeat home buyers.

What are the guidelines related to co-borrowers?

You may use a co-borrower for your mortgage. They will need to meet the qualifications of the mortgage lender you apply with, but it should not be an issue to have a co-borrower (including a non-occupant co-borrower).

Can you Buy a House Without Tax Returns?
You can buy a house without tax returns with an FHA loan if the underwriter does not require them. Otherwise, you will need a non-QM loan where tax returns are not needed.

One year Tax Return Mortgage