How many years of Tax returns is needed for a mortgage loan?

[Mike Ojo]

Just doing some calculations here. In applying for a loan, how many years of income is looked at or averaged? I ask because in the last 3 years, one year was a loss of income. First and last year both positive net income. Do loan officers look at your most recent income alone, meaning last year, or last 2 years. Or will they look up to 3 years? Also for a business owner, does your gross income play any factor or only the net income is looked at? please advise. Thanks.