Can You Buy a Home if You're Self-Employed? Absolutely—Here’s How to Do It in Hudson, WI or the Twin Cities

by Mark Johnson

If you're self-employed and thinking about buying a home in Hudson, WI or anywhere across the Twin Cities metro, you might be wondering:

Can I really get approved for a mortgage without a traditional job?

Show Consistent Income (Even If It’s Not Traditional)

Lenders want to see that your income is steady—even if it doesn't come from a salary. Most will ask for at least two years of financial documentation, including:

Personal and business federal tax returns (2 years)
Year-to-date profit-and-loss (P&L) statements
Bank statements showing regular deposits
1099 forms (if you do contract work)

If your income has ups and downs (common for entrepreneurs), be prepared to explain any dips and how your business remains stable.

Local insight: In towns like Hudson and Stillwater, seasonal or service-based businesses are common. Some lenders familiar with our local economy may be more flexible when reviewing variable income.

Keep Your Debt-to-Income (DTI) Ratio in Check

Your DTI ratio—the percentage of your income that goes toward monthly debts—is a key factor in mortgage approval.

Aim to keep your DTI under 43%, including your projected mortgage payment.

To improve your ratio:

Pay off credit cards and other debts before applying
Avoid taking on new loans in the months leading up to your home purchase

Why it matters: In competitive areas like St. Paul or Woodbury, where home prices are higher, keeping your DTI low can increase your buying power and help you qualify for better loan terms.

Be Strategic With Your Tax Returns

Self-employed buyers are typically evaluated based on net income (what’s left after deductions), not gross revenue.

If you write off too many expenses, it may look like you don’t earn enough—even if your business is thriving.

Tips to stay mortgage-ready:

Work with a CPA who understands both taxes and lending rules
If you're planning to buy soon, consider limiting deductions so your income looks stronger on paper
Review your last two tax years to see how lenders might view your financials

Even a small tweak to your next return could boost your approval chances significantly.

Save for a Larger Down Payment (If You Can)

Yes, you can buy a home with as little as 3–5% down. But as a self-employed buyer, putting down more upfront can work in your favor.

A larger down payment can:

Make you more attractive to lenders
Improve your loan terms
Help you avoid PMI (Private Mortgage Insurance)
Reduce your monthly payment

In areas like the Twin Cities, where prices run higher than in Hudson or River Falls, saving an extra 5–10% can really move the needle on affordability and loan options.

Work With a Mortgage Broker Who Gets Self-Employment

Not all lenders are equally experienced with self-employed buyers. Some offer more flexible options and understand how to read non-traditional income documents.

Look for a broker who offers:

Bank statement loans
No-tax-return options
Stated income loans (when available)

As a local agent, I work with mortgage brokers across Hudson, WI, and the Twin Cities who specialize in helping freelancers, real estate investors, and small business owners navigate the process.

Thinking About Moving to Hudson or Buying in the Twin Cities?

Whether you're a photographer in Minneapolis, a contractor in St. Paul, a salon owner in Hudson, or running your own business from home, you can absolutely buy a home.

You just need a solid plan and the right people on your team.

Let’s Talk About Your Next Move

If you're self-employed and ready to explore homes for sale in Hudson, WI or anywhere in the Twin Cities metro, I'm here to help.

✅ I’ll walk you through the buying process
✅ Connect you with trusted mortgage pros
✅ Help you feel confident from offer to closing

Ready to make a move in Hudson or the surrounding area?
Let’s talk! Contact The Johnson Group at Coldwell Banker Realty today to start your journey.

📞 Call us today at 651-333-7656
🌐 Or visit www.johnsonhomegroup.com
📍 Serving Hudson, WI and the greater Twin Cities metro area