The Sagen Alt-A Program: How Self-Employed Buyers in Vancouver Can Get a Mortgage Without a T4 (2026)

As a self-employed Canadian, you legally maximize write-offs for business expenses like tools, a home office, a vehicle, and meals—and your accountant ensures everything is correctly claimed. However, when you approach a bank for a mortgage, the income shown on your Notice of Assessment often doesn't reflect your true earnings.

This mismatch is the number one reason self-employed individuals face mortgage rejection. The good news is that this common obstacle is entirely avoidable, provided you use the right mortgage program.

What Is the Alt-A Program?

The Alt-A program, short for Alternative A, offers a specific tier of mortgage insurance for borrowers who are unable to verify their income through traditional means. In Canada, the Sagen Business for Self (Alt. A) program is the most widely adopted Alt-A option for self-employed individuals.

Sagen is one of only three mortgage default insurers in Canada, along with CMHC and Canada Guaranty. The Sagen BFS program is beneficial because it enables borrowers to state their business's actual, genuine income, rather than being limited to the lower amount reported on tax returns after deductions.

"Alt-A does not mean second-class. It means a different path to the same destination: a bank-rate mortgage with a competitive interest rate and a reasonable down payment."

Who It Is For

This program works well for:

• Sole proprietors, incorporated business owners, and partners in a business - all three structures are eligible.
• Freelancers, contractors, tradespeople, and consultants who have been operating for at least two full years.
• Business owners who write off significant expenses, making their taxable income much lower than their real earnings.
• Buyers in Metro Vancouver who want to purchase up to $1,500,000 with less than 20% down. 

Not eligible: borrowers whose primary income is commission-based. Also not eligible: anyone with a previous bankruptcy on record. These are firm exclusions under the Sagen program. Not eligible: Any refinances - only purchase transactions can utilize this program.

What You Actually Need to Qualify

To qualify, self-employed applicants must meet the following criteria:

• Business History: A minimum of two continuous years of self-employment is required. This must be verified by third-party documentation, such as a business license, GST/HST return summary, or articles of incorporation.
• Income Assessment: Your stated income must be deemed reasonable when evaluated against your industry, years in business, and the nature of your operation.
  
• Tax Compliance: You must have no tax arrears. Lenders will confirm this using your Notice of Assessment or statement of account.
• Down Payment: A minimum down payment of 10% is necessary. At least 5% must come from your own personal savings; the remainder can be received as a gift from a family member.
  
• Credit History:
  

-No mortgage or credit delinquencies within the last 12 months.

-No defaults on residential mortgages in the past 7 years.

-A minimum credit score of 600 is required for down payments under 20%.

-If your down payment is 20% or more, a credit score of 680 is recommended.

The Insurance Premium - What It Costs

The mortgage insurer requires an added premium, included in your mortgage at closing, to safeguard the lender since stated income is used instead of traditional income verification. A separate payment for this premium is not required.

For those who qualify for a 30-year amortization (first-time buyers or purchasers of new construction with over 80% Loan-to-Value), an extra 0.20% is added to this premium.

The Stress Test Still Applies

In Canada, even with Alt-A mortgages, the mortgage stress test is mandatory. As of 2026, this test requires you to qualify at the higher of your contract rate plus 2% or 5.25%. Given that current five-year fixed rates are around 4.29%, most borrowers must qualify at approximately 6.29%.

For Alt-A applicants, the accuracy of your stated income is crucial because it's the figure used in this qualification calculation. Submitting an income that is too low will fail to qualify, while an overly high amount may be rejected as unreasonable.

The 15% Gross-Up That Is Worth Knowing

For sole proprietors, many lenders utilizing the Sagen program (not Sagen directly) allow a gross-up, or add-back, of up to 15% on your Notice of Assessment (NOA) net income to compensate for business write-offs.

For example, a 15% gross-up on a declared net income of $85,000 increases your qualifying income figure to $97,750. This difference can be crucial, particularly in markets like Vancouver. This benefit is not automatically applied, and your mortgage broker must know how to utilize it.

What the Documentation Actually Looks Like

The documents depend on your business structure. Here is a general guide:

• Sole proprietors: T1 General with T2125 Statement of Business Activities for 2 years, GST/HST return summary or business licence, and most recent NOA.
• Partnerships: same as above, reflecting each partner's share of net income or loss.
• Incorporated companies: Articles of Incorporation, T2 Corporate Tax Returns, audited financial statements for 2 years, most recent personal NOA.

The common thread across all structures: your most recent Notice of Assessment (NOA) showing Line 15000 is always required — and it must confirm zero tax arrears.

Is Alt-A the Right Path for You?

This mortgage option is an excellent fit for established business owners:

Ideal Candidates: Businesses operating for over two years. Applicants with a clean credit history. Situations where the claimed income is genuinely supported by the business's financial reality and can sustain the mortgage payments.

This program offers a fully insured mortgage through major lenders, securing the same competitive rates as salaried employees, all without requiring a T4.

Who This Program Is Not For: Start-up businesses (brand-new). Individuals earning commission-only income. Anyone with a history of past bankruptcies. Cases where the stated income is unrealistically high compared to the business's actual ability to support it.

If you don't meet these requirements, there are still options, such as B-lenders, private lending, or strategizing to become eligible over the next one to two years. A skilled broker can assess these alternative paths and determine the best route for your specific financial situation.

Running your own business and not sure where you stand? Book a free conversation with Rowan, and he will look at your actual numbers and tell you exactly what is possible before you apply anywhere.