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2 questions -
does he have some proof he's been self employed for the last 2 years? - A business license? If he's been paid under the table, or simply doesn't have one then that will be an issue. Either that, or he'd better have a job that he's been on 2 years, where they pay him W2, or 1099.
2nd - did he actually sign anything at closing? if so, it will show on his bureau. If he didn't, I hope he has proof of at least a year's worth of consistent payments. - Front and backs of cancelled checks, or 12 months worth of bank statements showing every month, a large amount of money was drawn - to pay a mortgage.
If neither of those are present, then this will be a mess to do, without seeing his credit it will be a push to say if it can be done or not. A stated loan still requires reasonable proof that he has the resources to pay (a job, or some other proof showing he's paying taxes somehow)
You might be able to do NO DOC, but unless there's huge equity and he has decent credit this isn't really an option.
If he has cashflow, and proof of self employment, have him gather his last 12 mos. of complete bank statements, and go for it. 12 mos. bank statements showing a consistent monthly deposit a lot of times will get you a similar rate as someone who actually earns the money and pays taxes on it (like a W2 employee who shows ALL income).
Stated, is expensive. if he has less than say, 15% equity in the house as it sits, the new rate is probably gonna look like the old one, or damn close.
rjp
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