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WASHINGTON – March 22, 2010 – Self-employed and seasonal workers historically have struggled to meet eligibility criteria for loans. Their plight has worsened of late, however, now that changes to Fannie Mae and Freddie Mac rules governing “no doc” and “no ratio” loans have kicked in.

Under the revised guidelines, self-employed individuals, 1099 filers, and new business owners must compile two full years of tax returns before qualifying for a mortgage backed by the firms.

“In years past, we were allowed to go to a website and get an average of what someone in their career would make, so it was stated income based on some statistics, but not any more,” explains Fort Worth-area Realtor Suzy Britz. “It’s a problem. And it’s been a problem. As soon as the stated income programs went away, some definite doors were shut on these people.”

Some hurt their chances of qualifying even more by writing off as many business expenses as possible, which lowers adjusted income. The National Association of Realtors says self-employed borrowers should avoid taking every deduction possible, expect to make a 20 percent downpayment and have a stellar credit score.

Source: Fort Worth Business Press 03/22/10) Howe, Aleshia

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