Your Side Hustle Can Buy You a Home: How to Make Gig Income Work for a Mortgage

A new path to homeownership

If you’ve ever felt like you can’t buy a home due to not having a traditional 9-to-5 job, you’re not alone.

But traditional 9-5 jobs that come with a steady paycheck every other week showing the same taxable earnings have continued to evolve in recent years. More and more freelancers and gig workers are making decent, steady income.

Fortunately, your side hustle doesn’t have to keep you from buying. In fact, it can actually help you qualify for a mortgage as lenders are adapting to this new reality.

The rise of gig workers in the housing market

Many gig workers, freelancers, and side hustlers believe that without a steady paycheck, homeownership is impossible. But here’s the truth: Your gig income isn’t a barrier—it’s an asset.

More lenders are recognizing freelance and variable income as a legitimate path to homeownership, and with the right approach, you can qualify for a mortgage.

The rise of remote work, online businesses, and the gig economy means that homebuyers no longer fit into one neat box. Whether you drive for Uber, sell on Etsy, create content on YouTube, or work as a freelance designer, your income counts.

The key is knowing how to present your finances in a way that makes lenders feel confident in approving your loan.

The gig economy has exploded, especially post-pandemic, and more people than ever are using self-employment and side-hustle income to qualify for a mortgage.

Just check out a couple of key findings in a recent survey by Fannie Mae:

• Nearly half of lenders report an increase in mortgage applicants using gig income, and most expect this trend to continue.
• 67% of lenders believe accepting gig and variable income will improve access to homeownership.

Lenders are adapting, and while it may take extra preparation, your income from freelancing or gig work can absolutely help you secure a home loan.

Making your gig income mortgage-ready

So, how do you turn your side hustle earnings into a mortgage approval? Here’s what lenders want to see:

1. Stability

Being able to show stable income is key. Lenders require two years of consistent gig income to prove that your earnings are reliable. Some exceptions exist if you have a strong financial profile or a history of working in the same field before going independent.

2. Documentation

Unlike a salaried employee who simply submits a couple of paycheck stubs and W-2s, you’ll need to provide additional paperwork to support your income.

• Tax Returns: Typically at least two years’ worth, showing steady or increasing income.
• Bank Statements: Your bank statements help verify your cash flow and consistency.
• Profit & Loss Statements: P&L’s are especially helpful if you run a small business or have multiple streams of income.
• Invoices & Contracts: Your ability to show evidence of ongoing work and future earnings can show your lender stability.

3. Overcome Lender Concerns

Because 83% of lenders struggle with gig income approvals, staying organized is crucial. Keep personal and business finances separate, and be ready to explain any income fluctuations.

4. Improve Your Debt-to-Income (DTI) Ratio

Your DTI ratio compares your monthly debt payments to your income. The lower it is, the better your chances of approval. Here are a few strategies to improve your DTI:

• Pay down your credit card debt and personal loans.
• Increase your reported income (within tax guidelines).
• Avoid new debt before applying for a mortgage.

5. Save for a Down Payment

Even a small amount of savings for your down payment (and ideally some leftover reserve funds) can strengthen your mortgage application. Fortunately, you don’t need a ton of savings for a down payment. Use a portion of your side hustle income to build a dedicated down payment fund.

• FHA loans require as little as 3.5% down.
• Many first-time homebuyer programs offer grants or down payment assistance.

Finding the right home loan and mortgage lender

Not all lenders treat gig income the same way. Some specialize in working with freelancers and self-employed borrowers.

It’s a good idea to do your homework by researching lenders, as lenders have varying perspectives on loan guidelines. According to Fannie Mae’s survey, “46% want more detailed rules on gig income, while 29% think current guidelines are fine”. Shop around to find one that understands self-employed mortgage borrowers.

You may also want to research lenders that offer alternative documentation loans.

Bank statement loans, for example, are an alternative way that some lenders allow as a way to show your income. Instead of pay stubs and W-2s to document your income, your last 12-24 months of deposits are averaged to support your income.

Another option that may be worth exploring is an asset depletion loan. This program can be great if you have money in the bank, but you can’t really document steady income.

With an asset depletion loan, the lender calculates your monthly income based on your liquid assets, including checking and savings accounts, investments, and retirement funds. Using a specific formula, they typically divide your total assets by 360 (representing the number of months in a 30-year loan term) to estimate your monthly income for qualification purposes.

Actionable steps: How to start your homeownership journey today

Getting a mortgage as a gig worker takes preparation, but it’s definitely possible. Here are a few tips:

1. Start Tracking and Organizing Your Income Now
   • Use accounting apps like QuickBooks, Wave, or a simple spreadsheet to track your earnings.
   • Keep digital copies of all invoices, tax returns, and bank statements.
2. Consult with a Mortgage Professional Who Understands Gig Workers
   • Not all loan officers are experienced with freelance income—find one who is.
   • Get pre-qualified early to identify any potential roadblocks.
3. Boost Your Credit Score and Savings
   • Pay bills on time, keep credit card balances low, and avoid unnecessary new debt.
   • Consider opening a high-yield savings account for your down payment.
4. Take Advantage of First-Time Homebuyer Programs
   • Look for local, state, and national down payment assistance programs that offer grants or lower interest rates.
   • Some programs allow alternative income verification, making them ideal for mortgage borrowers with side hustle income.

The bottom line: Your side hustle is an asset, not a setback

You don’t need a traditional job to buy a home, and your gig work doesn’t have to be a barrier to owning a home. With the right financial habits, documentation, and lender choice, your gig income can actually help you qualify for a mortgage.