Getting home loan with new S-Corp

[Leland S.]

I took a contract job a month ago in Phoenix where I organized as a 1099 contractor for tax benefit. Now lenders won't give me a loan. I am in the same industry and could switch back to W2 for a big hit in income. I was hoping to buy a primary property and airbnb or rent the other rooms to reduce costs and build equity in something (point is to not waste money renting). Most lenders tell me they need 2 years of income, but the contract is only 1-2 years anyway at which time I'll probably go full time or find another contract. One lender said if I had 6-12mo maybe he could do it.

Has anyone also ran into this issue and managed to get around it? 

My next step is to check with a credit union which I understand doesn't use Fannie/Freddie.

My more precise situation is:

- decent contract income

- probably paying myself 100k salary, the rest in shareholder distributions

- will attempt to fund 401k to as high I can to use checkbook access when I have sufficient funds

- Low "corporate" expenses are just legal, taxes etc

- deductions are just home office usage and car mileage

Ideally I can manage to get a loan in my current situation. Otherwise the loss of taxes as a W2 employee would likely be much higher than the taxes gained on home ownership (which I think is just mortgage interest). 

It may be a blessing in disguise as prices in Phoenix area are ridiculous to me. 400k for houses that look like I am in Tijuana. It's possible now is a good time to save for the next downturn.