If you are self-employed and buying in north Scottsdale, two separate things can slow your file: an underwriter rebuilding your income downward from two years of returns, and a property that carries questions production housing never does. Well water, septic, acreage, and a comparable sales set that thins out fast.
Most lenders look at the first and discover the second in week four.
How an underwriter rebuilds your income
Two years of filed returns, through Fannie Mae Form 1084 or Freddie Mac Form 91. Not revenue, not your profit and loss.
- Schedule C: net profit line 31, plus depreciation, depletion and business use of home added back, minus non-recurring income, divided by 24.
- 1120S and K-1: your W-2 wage counts. K-1 ordinary income counts only where distributions are documented and the business has liquidity to keep paying them.
- 1065 and K-1: same, with guaranteed payments included.
- Schedule E: rental net with depreciation, taxes, insurance, interest and HOA added back where allowed, minus full PITIA.
Each dollar of aggressive deduction saves tax at your marginal rate and costs roughly four to five dollars of buying power. And a year two lower than year one generally becomes your qualifying income rather than the average.
What north Scottsdale adds
The corridor running north from the 101 toward Carefree and Cave Creek is large-lot desert, much of it custom, with a very different property profile from the master-planned communities to the south.
Well and septic are real underwriting items, not formalities. Where a parcel is served by a private well rather than municipal water, expect documentation of the well, potability and flow testing on some programs, and questions about shared well agreements where one applies. Septic systems carry their own inspection and, in Arizona, a transfer-of-ownership inspection requirement. Ask about both on the specific parcel before you write, because these add days and occasionally kill deals.
Acreage changes the appraisal. Large parcels are harder to compare. An appraiser needs sales of similar acreage with similar improvements, and in a market where few of those close in a year, the comp set stretches and adjustments grow. Some programs also limit how much land value they will lend against relative to the improvements.
Custom homes transact infrequently. The practical effect is appraisal risk on a jumbo file with a closing date attached. Order it early and decide in advance what you do with a short value. See Jumbo Loans in Scottsdale.
You are almost certainly in jumbo territory, which means reserves held in verifiable assets after closing, tighter ratio tolerances and fuller documentation. For a self-employed borrower the reserve test is the sharp edge: money in a business operating account is not automatically counted as yours, and moving it out has tax consequences your CPA should see first.
Association obligations vary enormously here. Some north Scottsdale parcels sit in gated communities with layered dues; others have no association at all. That difference is worth real purchasing power on your ratio. Confirm for the specific address. See HOA Dues, Club Dues and Assessments.
When the returns do not support the purchase
Take the conventional jumbo if your returns support it. Nearly always the cheapest money available. When they do not, none of what follows is a shortcut around qualifying. Each proves repayment capacity differently and prices differently than agency financing.
Bank statement. Twelve or twenty four months of deposits with an expense factor applied. Transfers between your own accounts are stripped from the calculation. See Bank Statement Loans in DC Ranch.
Asset depletion. Qualifying income derived from verified liquid assets rather than earnings. Retirement accounts typically discounted, pledged assets generally excluded.
No-ratio. No debt-to-income test at all. Credit, assets, reserves and the property carry the file.
One caution specific to this area: not every non-QM investor will lend on a parcel with a private well, a shared well agreement, or substantial acreage. Combining an unusual income structure with an unusual property narrows the field considerably, so raise both on the first call rather than discovering the overlap late.
Before you write in north Scottsdale
- Ask whether the parcel is on a well or municipal water, and whether any shared well agreement exists.
- Ask about the septic system and the transfer inspection.
- Ask how many associations bill the address, if any.
- Count your reserves the way a lender will: after closing, at the applicable discount, excluding business funds you cannot document access to.
- Get your CPA and your lender in one conversation before the qualifying returns are filed.
- Order the appraisal early and plan for thin comps.
- Get fully underwritten, not pre-qualified. A pre-qualification is a calculator. An underwritten pre-approval means a human read your returns and K-1s.
Why bring this file to us
- We ask about the well and the septic on the first call, because those are the items that move a closing date and most lenders meet them in underwriting.
- We read the returns ourselves, add-backs and all.
- Broker model. An unusual property plus a self-employed file needs multiple investors, not one bank's shelf.
- The full toolkit, agency jumbo through bank statement, asset depletion and no-ratio non-QM.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me the parcel and two years of returns before you write in north Scottsdale, and I will tell you what the property and the income both support.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Well, septic and property eligibility requirements vary by loan program and investor and change over time. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, and other qualifying factors. Not all applicants will qualify. Non-QM and no-ratio financing carries different pricing and terms than agency financing. Consult your tax advisor before moving funds out of a business entity.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
