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All Forum Posts by: Joe Maron

Joe Maron has started 1 posts and replied 2 times.

Thanks everyone for your thoughtful and insightful responses! It makes sense that the "loophole" I perceived would fall apart even under light scrutiny. I certainly wouldn't want to deceive anyone that I do business with, so I will not pursue this idea further.

@Stephanie Medellin  Good idea. The Fannie Mae guidelines do state that it's possible to get approved with 1 year tax returns if you remain in the same field -- the major caveat being that you need to earn at least as much as you did at your last position. Fingers crossed on that!

@Eric Veronica That's a great point. With that filing information, I think anybody with half a brain would identify this behavior as something akin to a straw purchase.

@Jeff Dulla I appreciate your nuanced response! It raises a related question: suppose that I have a legitimate reason to restructure my business. For example, I bring in four non-employee investing partners, such that the five of us have 20% stakes in the corporation. As the sole employee of the corporation, yet working at the behest of the board, am I still considered self-employed? Does it come down to specific guidelines or just a "smell test"?

Hello folks! I have a question about getting a mortgage underwritten as a newly self-employed person.

I recently decided to leave corporate hell and started a one-man, one-owner corporation. I pay myself a base W2 income plus a variable bonus every month.

Unfortunately, self-employment is not looked upon favorably by lenders as it is not considered stable income without at least one full year of evidence to the contrary. So I'd really like to avoid being classified as self employed!


The Fannie Mae underwriting guidelines define a self-employed person as follows:

  • Any individual who has a 25% or greater ownership interest in a business is considered to be self-employed.


So, suppose I sell or otherwise transfer 76% ownership of my corporation to another person, perhaps an uninvolved family member. Is it really true that I'm now just a normal W2 employee for underwriting purposes? That would make getting approved heaps easier... so much easier that my proposed solution seems fraud-level "gamey" and I suspect a lender would see through it.

What do you folks think? Is this a valid "loophole" to avoid being treated as self-employed? Thanks very much for your perspectives!