Jumbo Loans for Self-Employed Borrowers | Is It Possible?

Don’t lose hope just because lenders have told you that your income is “complicated” or have turned you away.

While being self-employed may make a loan a bit tricky, it does not mean that you should keep dreaming of obtaining that high-value home.

Jumbo loans, especially those for self-employed borrowers, can help you qualify without fitting into the usual financial mold.

How do they work? What are the requirements? Let’s find out.

What Are Jumbo Loans, and Why Do Self-Employed Borrowers Need Them?

Jumbo loans are sometimes referred to as non-conforming loans as they surpass the yearly maximum restrictions established by the Federal Housing Finance Agency (FHFA). The baseline conforming loan limit for most of 2025 is $806,550.

In high-cost markets, including San Francisco or Los Angeles, the conforming limits tend to be higher. What if the price of the house you want to buy exceeds these limits? This is where jumbo loans come into play.

Lenders consider the potential risks, such as borrowers leaving their homes, when structuring loan repayment plans. However, conforming loans are specifically designed to cater to a broader range of borrowers, including self-employed individuals and those who earn income from informal market activities.

Types of Jumbo Loans for Self-Employed

Self-employed borrowers have a much harder time qualifying for a traditional jumbo loan. Still, the lending world offers special solutions developed specifically for this type of financial situation.

Here are the most common types of jumbo loans for self-employed individuals:

1. 1099-Only Loans

These loans are ideal for independent contractors and freelancers who receive 1099 forms instead of W-2s. Lenders calculate income based on the 1099 forms you’ve received, making this option perfect for borrowers who deduct significant business expenses and want to avoid being disqualified by their adjusted gross income.

2. Bank Statement Loans

For borrowers with fluctuating or irregular income, this option evaluates financial health based on personal or business bank statements. Lenders review 12-24 months of deposits to calculate your cash flow, bypassing the need for traditional tax returns or pay stubs.

3. Investor Cash Flow Loans/ DSCR Loans

This loan is specifically for those purchasing rental properties. Instead of looking at personal income, lenders base approval on the property’s rental income. This option is particularly beneficial for expanding real estate portfolios.

4. Asset Depletion Loans

These are the types of loans that are more favourable for those borrowers who may have sufficient assets but do not have a regular income. The lenders use total asset value savings, investments, or retirement plans to determine a borrower’s qualifying income. This simplifies acquiring a loan, one which would have been difficult to secure since, traditionally, there is no employment income.

5. Portfolio Loans

Portfolio loans are those provided by banks that keep them in-house rather than selling them to the secondary market, therefore offering flexibility relative to leader qualification. The lenders have the freedom to customise the terms, often with the aim of catering to borrowers with unique financial profiles, such as those with equity in business or those with inconsistent income streams.

6. Piggyback Loans

Piggyback loans involve splitting your total mortgage into two loans, a conforming loan and a smaller second loan. This method helps borrowers keep the total loan-to-value ratio down and may help them avoid private mortgage insurance (PMI) as well. Some piggyback loans could even lead to a reduction in the interest rate charged to the borrowers.

What Challenges Do Self-Employed Borrowers Face with Jumbo Loans, and How Can They Overcome Them?

Different self-employed borrowers face unique challenges.

Here’s how specific profiles can tackle through jumbo loans:

1. Tech Entrepreneurs: Use company equity or investment portfolios to strengthen your financial profile. Portfolio loans can be a great fit for tech founders with significant stock options.
2. Real Estate Investors: Consider DSCR (Debt Service Coverage Ratio) loans, which qualify you based on property cash flow rather than personal income. This is ideal for expanding rental portfolios.
3. Freelancers with Fluctuating Income: Build a three-year average of income to show consistency. Bank statement loans can also help demonstrate cash flow when income varies from month to month.
4. Retirees with Assets: Use asset depletion loans to convert savings or retirement accounts into qualifying income. This is particularly useful for individuals who lack a steady paycheck.

Why are Jumbo Loans worth it for the self-employed?

Despite the challenges, jumbo loans offer unparalleled benefits:

• Access to High-Value Homes: Luxury properties in exclusive neighbourhoods become attainable.
• Flexible Income Verification: Alternative documentation options cater specifically to self-employed borrowers.
• Customisable Loan Options: From primary residences to investment properties, jumbo loans offer versatility.

Imagine owning a home that reflects your hard work and ambition—jumbo loans make it possible.

Tips for Increasing Your Chances of Approval

How can self-employed borrowers increase their odds of securing a jumbo loan?

Follow these steps:

• Refine Your Credit: Ensure that your score is above 720 to give your application a boost.
• Reduce Debt: Repay credit card balances and existing loans to turn around the DTI ratio.
• Save for a Hefty Down Payment: While the standard down payment is 20%, saving up more could put you in a better light.
• Compare Lenders: Not every lender has non-QM products. You can shop around for lenders with experience pertaining to self-employed jumbo loans.
• Interview a Mortgage Advisor: Finding help from someone who specialises in your type of situation can ease the situation.

How can a mortgage broker help self-employed borrowers?

Mortgage brokers will be a panacea for self-employed borrowers.

Why they do matter:

1. Ties with Niche Lenders: The brokers get linked with specialised lenders offering non-QM loans such as bank statement loans or investor cash flow loans. They can guide in the hands of some institutions that are not easily available to the lay public.
2. Tailored Solutions: Brokers assess your unique financial situation and recommend the best loan options. Whether you need a 1099-only loan or an asset depletion mortgage, they streamline the process.
3. Time is saved: Brokers do the work for you rather than you going from lender to lender, meaning their fees represent a great value for the time saved for you while acquiring the best price possible to take.

Your Path to Luxury Living Starts Here

Proving the pathway to high-end property loans for self-employed borrowers. Alternative lending strategies include personalised advice that, when executed through reputable brokers, can build with confidence the road that they can tread. The journey may seem daunting, but a little preparation could go a long way.

Are you ready to take that step? Consult Amish Munshi today and turn your dream of luxury living into reality.