Yes, and the direction of the switch matters a lot. Going from 1099 to W-2 is generally the easy case. As a contractor, the lender assumes you have business expenses (mileage, supplies, rent, employees) that reduce your true net income. A W-2 job in the same line of work usually gives a clean, consistent salary or hourly figure the lender can use right away. Going from W-2 to 1099 is the harder direction. The default across FHA, Fannie Mae, and Freddie Mac is two years of tax returns in the new self-employed role, with income counted as the net after business expenses, averaged over the documented period. A one-year exception exists when your most recent return covers a full 12 months of the self-employment and you can document prior work earning similar income in the same field, but two years is the safer path; the exception is something you qualify into, so plan around the default. The practical takeaway if a move is coming: if you are about to leave W-2 work for self-employment and a purchase is on the horizon, it is often worth qualifying and buying before the change, since income that is easy to use today can become hard to use for a while afterward. Confirm the specifics with your lender, since requirements vary by program.