Can my S-Corp paystub (W-2) qualify me for a conventional loan?

[Matthew Cervoni]

This question is for the lenders out there!

I am planning my second house hack and would like to get pre-approved so I can start getting serious about the deals I am analyzing. My last house hack allowed me to save enough money to leave my day job and start my real estate bookkeeping business, it's been extremely rewarding! 

I know when someone is self-employed, lenders like to see 2 years of income history from that activity on a tax return. However, my company is taxed as a S-Corporation and I pay myself a consistent W-2 wage. Would I be able to use that income for getting a conventional loan approved even though it has not been 2 years?

[Shaun Weekes]

Quote from @Matthew Cervoni:

This question is for the lenders out there!

I am planning my second house hack and would like to get pre-approved so I can start getting serious about the deals I am analyzing. My last house hack allowed me to save enough money to leave my day job and start my real estate bookkeeping business, it's been extremely rewarding! 

I know when someone is self-employed, lenders like to see 2 years of income history from that activity on a tax return. However, my company is taxed as a S-Corporation and I pay myself a consistent W-2 wage. Would I be able to use that income for getting a conventional loan approved even though it has not been 2 years?

Since you're self employed you can control your income up or down. For this reason and some others, conventional guidelines will base your income on the last tax return filed. So, your paystub will be required to show you still are earning income but the DTI( debt to income ratio ) will based on your previous years W2 and K1 earnings from your 1040's and 1120's

If you can prove you have been in business for over 5 years Freddie will take one year of returns. At the top right of your 1120's will be the date of incorporation which is proof. 

Fannie might take one year if under 5 years in business but it's all random and based on their automated UW system.

I hope this helps and have a good one.