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I was recently offered a job after interviewing. They offered either w2 or corp 2 corp work. I chose corp to corp and created an LLC and signed a year long renewable contract as a single member LLC taxed as S-corp meaning I payroll myself. They drug tested / background checked and provided a laptop, a bit of training and guidelines.

I've been in the same industry since 2017, have incrementally made more money and gained more seniority by title.

Recently I applied for a Freddie / Fannie loan. They said I was self employed.

Somehow I can't imagine this is true. I feel like there must be an exception for this circumstance. If I hired another developer to work in my place my company would terminate our relationship. They hired me and and offered either c2c or w2.

Either way, if Freddie / Fannie's only measure is if I own 25% or more of the company and there are no exceptions for this case is it okay to assign a family member 75% of the company and reapply?

Thanks

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  • Are you in a situation where you cannot get the loan because you are self employed? Simply because you elected to do C2C instead of W2?
    – TTT
    Feb 11 at 20:29
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Recently I applied for a Freddie / Fannie loan. They said I was self employed.

Somehow I can't imagine this is true. I feel like there must be an exception for this circumstance.

By self employed they mean that you are not a W-2 employee. You setup a C2C relationship, and formed a company. You decide how much of the corporate income is your salary. They have to do a lot more analysis to determine what your income really is. They can't look at the W-2 from last year, and recent pay stubs.

Self employed people always have more hoops to jump through to get loans.

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  • Exactly. "I payroll myself makes it about a clear as can be that OP is self-employed.
    – RonJohn
    Feb 11 at 18:13
  • But think about it logically, my company hired me, employs me and asked for c2c to avoid benefits. I don't go out and get clients. They are my sole client. If I were to take on another client I would be let go. This isn't self employment in the traditional sense at all.
    – Quesofat
    Feb 11 at 18:15
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    You are your own company. They are your customer/client. Feb 11 at 18:17
  • I'll give give 75% ownership to someone else then. Problem solved.
    – Quesofat
    Feb 11 at 19:24
  • OP is actually a W-2 employee. (Has to be.) But, apparently it doesn't matter. "Self employed" to them just means 25% or more ownership of the company.
    – TTT
    Feb 11 at 20:28

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