A good fit if
- You're an independent contractor, consultant, or gig worker
- Real estate agents and commission earners
- Your deductions make your tax return look thin
Probably not if
- Most of your income is on a W-2
- Your 1099 income dropped sharply this year
- You own a business with employees (a bank statement or P&L loan may fit better)
How 1099 Loans Work
The lender adds up your 1099 income for the last one or two years, subtracts a flat expense factor (usually 10%), and uses the result as your qualifying income. Your deductions on Schedule C don't come into it. Many lenders accept a single year of 1099s if you've been with the same payer for at least a year.
Example: $150,000 in 1099 income with a 10% expense factor is $135,000, or $11,250 a month. If your tax return shows $70,000 after deductions, the 1099 approach nearly doubles your qualifying income.
Who 1099 Loans Are For
- Independent contractors and consultants
- Real estate agents and loan officers paid on commission
- Insurance and sales professionals paid on 1099s
- Medical professionals working as contractors, such as travel nurses and locum physicians
- Gig workers and freelancers with steady 1099 income
1099 Loan Requirements
- History: 1 or 2 years of 1099s; 1 year is often fine with the same payer.
- Expense factor: usually a flat 10%, and 10–25% at some lenders.
- Credit: from about 620 at many lenders; a few allow no-score borrowers at lower LTVs.
- Down payment, primary home: usually 10–20%; up to 90% LTV at some lenders with strong credit.
- Debt-to-income: up to 50% at most lenders.
- Loan size: up to about $3 million, higher at some.
Read the 1099 loan guide for more detail on the calculation and how lenders look at multiple payers.
How to Qualify for a 1099 Mortgage
- Gather your 1099s for the last one or two years.
- Total them and subtract 10% to estimate qualifying income.
- Pull proof of current income, such as year-to-date statements or recent deposits.
- Check your debts against the new payment to estimate your DTI.
- Send me your numbers, and I'll compare 1099 with bank statement qualification.
Documents You'll Need for a 1099 Loan
- Your 1099 forms for the last one or two years
- A recent pay record, such as a year-to-date statement or recent deposits
- Proof of your work history, often one to two years with the same payer or in the same field
- IRS transcripts, which many lenders use to confirm the 1099s
- Two months of statements for your down payment and reserves
- Photo ID and credit authorization
1099 Loan vs. Bank Statement Loan
| 1099 loan | Bank statement loan | |
|---|---|---|
| Income based on | 1099s minus a flat 10% | Deposits minus an expense factor |
| Paperwork | 1099s, YTD proof, transcripts | 12–24 months of statements |
| Best when | Paid by a few clear payers | Many small payments, or a business entity |
If you run your work through an S-corp or LLC and have a preparer-signed P&L, a P&L loan may be another option.
1099 Loan FAQ
Can I get a mortgage with only one year of 1099 income?
Yes, at many lenders, usually if you've been with the same payer or in the same line of work for at least a year.
Can I combine 1099 and W-2 income?
Many lenders allow it, depending on the program. Tell me how you're paid and I'll find the best structure.
What if I have several 1099s from different companies?
That's common for contractors. The lender totals them, as long as the work is ongoing.
Do 1099 loans require tax returns?
No. Lenders use your 1099s and often IRS transcripts to verify them, but not your Schedule C deductions.
Can I use a 1099 loan for an investment property?
Yes. 1099 loans work for primary homes, second homes, and investment properties.
Available for properties in California. Guidelines shown are typical and are not a commitment to lend. Your terms depend on credit, documentation, property, and the lender's current guidelines, and can change without notice.