If you’re in business for yourself or BFS as it’s commonly called, it can be difficult to qualify for a mortgage. In 2012, the Office of the Superintendent of Financial Institutions made it tougher for individuals to get mortgage approval. The banks were federally regulated to tighten their rules for being approved for a mortgage. To become approved now, you need to have the appropriate net income. There are a few ways that you can increase the chances that you get mortgage approval if you’re self-employed.

Why BFS Individuals Struggle to be Approved for a Mortgage

Self-employed individuals don’t pay as much tax and can have business write-offs and can be penalized with higher fees and rates. Here are a few reasons why self-employed individuals struggle for mortgage approval.

  • Your individual credit matters
  • It’s based upon where your income comes from and for how long you have received it. It might be from a contract, commission, and so on
  • The down payment on your mortgage matters
  • Other factors

Most BFS people need a consultant that understands how BFS mortgages work as they can be complicated and multiple factors can be involved depending upon your individual situation.

BFS Programs

There are several BFS programs such as BFS Conventional, State Income, private Lender, or Alternative Lender. Here are some of the better programs through various institutions.

B2B Bank

This bank offers the BFS Expanded Program. You can show up to 12 months of bank statements under the program and there are no fees or mortgage premiums to pay.

Street Capital

They offer Secured Stated Income to 90% or a 10% down payment program. You need to be in business for two years filed and 5% of the payment needs to come from your savings. They charge no commission on sales.

Common Questions

Many people have questions about BFS so here are some answers to those questions.

Question: I’ve worked for the same company for the past several years. I’m now working on my own and self-employed in the same field of work. Can I qualify for a mortgage even though I have less than two years filed in my current business?

Answer: Yes, you can qualify for a mortgage. If you have kept the same job type as a self-employed individual, you shouldn’t face a problem.

Question: Do you need 20% to qualify for a self-employment mortgage?

Answer: Many lenders require 20% down, but there are some that allow for just 10% down.

Question: I work in the service industry and get most of my money making tips from customers. Can I qualify for a mortgage with this income?

Answer: If you don’t declare tip money, some lenders will look at six months of deposits into your bank account.

Question: Can I refinance to pay off the CRA debt that I owe?

Answer: Yes, you can do this as it’s a very common practice.

Self-Employment Mortgage Tips

  • Make sure your business income is in one account. You want to separate the expenses and the income accounts that you have.
  • Loans or leases on vehicles for your business need to come out of your business account not a personal one.
  • If your company gives you an allowance or stipend for any vehicle then make sure this is taxable income. You need two years to use it as income.
  • Your invoices should be matching your deposits.
  • When you deposit other money such as tips make sure you tag this on the deposit slip, so it shows up with your deposit online.
  • Keep your important documents such as GST/HST, articles of incorporation, business licenses and other documents in one file with your tax returns. Make sure you keep records for three years from the date of the original return or two years from the time the tax is paid if you’re filing a refund or credit claim after the return is filed. Make sure you keep seven years of records if you file a loss claim for bad debt deduction or worthless securities. The key is to stay organized with your documents.
  • If you don’t file business financials, then file T2’s if you’re incorporated. Filing your business financials might be more expensive, but it can help you qualify for a mortgage with lenders.
  • If you’re paying yourself dividend income, then you need two years’ worth.


When you’re in business for yourself, it offers you a lot of freedom. Getting a mortgage can be more difficult as a self-employed person. If you just started as a self-employed individual, plan for your mortgage now. Talk to a financial planner if you need help understanding BFS guidelines and how they apply to mortgage approval.