Google Rating
4.9
See all our reviews
1099 Mortgage — Home Loans for Independent Contractors
As a 1099 contractor, you're technically self-employed in the eyes of mortgage lenders — which means different rules apply. Whether you're a consultant, freelancer, gig worker, or independent contractor, this guide explains your mortgage options, documentation requirements, and how to strengthen your application for homeownership.
Trusted by over 2,500 California families
1099
Specialists
Multiple
Qualification Paths
Bank Stmt
Options Available
Get Pre-Approved as a 1099 Contractor
No impact to your credit score.
Get Pre-Approved as a 1099 Contractor
No impact to your credit score.
What Is a 1099 Mortgage?
A 1099 mortgage is a home loan designed for borrowers who receive 1099 tax forms instead of W-2s. If you're an independent contractor, freelancer, consultant, or gig worker, you're classified as self-employed by lenders. This means you'll need to document your income differently than traditional W-2 employees — but there are multiple loan programs built specifically for your situation.
Here are some of the most common types of 1099 workers who qualify for these specialized mortgage programs:
Consultants & Freelancers
Business, marketing, writing, design, and other professional consultants
Real Estate Agents
Licensed agents earning commission-based income on 1099 forms
Insurance Agents
Independent insurance professionals with commission-based earnings
Uber/Lyft Drivers
Rideshare and delivery drivers classified as independent contractors
Healthcare Contractors
Travel nurses, locum tenens physicians, and allied health professionals
IT Contractors
Software developers, engineers, and tech professionals on contract
Sales Professionals
Independent sales reps earning commissions across various industries
Creative Professionals
Photographers, videographers, musicians, and content creators
Mortgage Options for 1099 Contractors
Traditional (Tax Returns)
Use 2 years of personal and/or business tax returns to verify income. This is the most common path and typically offers the best rates. Lenders average your net income from Schedule C over 24 months.
Bank Statement Loans
Qualify using 12-24 months of personal or business bank statements instead of tax returns. Ideal for contractors who take significant tax deductions that reduce their reported income on returns.
1099-Only Programs
Some lenders accept your 1099 forms combined with bank statements to verify income — no full tax returns required. A great middle-ground option for contractors with consistent 1099 earnings.
Asset Depletion
Qualify based on your liquid assets (savings, investments, retirement accounts) rather than monthly income. Lenders divide your total qualifying assets by the loan term to calculate a monthly income figure.
1099 Mortgage Requirements
Tax Return Docs
- 2 years personal & business tax returns
- All 1099 forms received
- Year-to-date profit & loss statement
- Business license (if applicable)
Bank Statement Docs
- 12-24 months bank statements
- 1099 forms from clients
- Business license
- CPA letter confirming self-employment
Credit — Conventional
- Minimum: 620+
- Preferred: 680+ for best rates
- Ideal: 740+ for lowest rates & PMI
Credit — FHA
- Minimum: 580+ with 3.5% down
- Lower scores: 500-579 with 10% down
- Same 2-year self-employment history required
Credit — Bank Statement
- Minimum: 620-660+ (varies by lender)
- Best rates: 700+ credit score
- Higher scores offset alternative doc risk
Down Payment
- Conventional: 3-20%
- FHA: 3.5% (with 580+ credit)
- Bank Statement: 10-20%
Larger down payments improve approval odds for self-employed borrowers.
How Lenders Calculate 1099 Income
Tax Return Method
Lenders average your net income from Schedule C (sole proprietor) or K-1 (partnership/S-corp) over 2 years. They add back certain deductions like depreciation and depletion, then divide by 24 months to determine your qualifying monthly income.
Bank Statement Method
Lenders total all deposits over 12-24 months, apply an expense factor (typically 50% for most industries), and calculate a monthly average. This method often produces a higher qualifying income for contractors with significant tax write-offs.
1099-Only Method
Lenders total all 1099 income received and may apply an expense factor to determine net income. This is then averaged monthly. Some programs combine 1099 forms with bank statements for a more complete income picture.
Challenges for 1099 Borrowers (And Solutions)
Tax deductions reduce qualifying income
Use bank statement loans that look at gross deposits rather than net income on tax returns. This can significantly increase your qualifying income.
Income fluctuates month to month
Bank statement programs average your deposits over 12-24 months, smoothing out seasonal or variable income patterns common among contractors.
Less than 2 years of self-employment
Some bank statement and non-QM programs accept 1 year of self-employment history. Having prior W-2 experience in the same field can also help.
Mixing personal and business finances
Open a dedicated business bank account immediately. Lenders need to clearly identify business income, and commingled funds complicate the process.
Higher interest rates on alternative docs
Improve your credit score to 700+ and put 20%+ down to get the best available rates. You can also refinance to a conventional loan once you have 2 years of strong tax returns.
Tips for 1099 Contractors Buying a Home
Keep Detailed Income Records
Maintain organized records of all contracts, invoices, and payments. Having clean documentation makes the mortgage process significantly smoother and faster.
Maintain Consistent Bank Deposits
Regular, consistent deposits in your bank account strengthen your application. Avoid large cash deposits that are difficult to document or explain to underwriters.
Build Credit to 700+
A higher credit score opens more loan options and better rates. Pay all bills on time, keep credit utilization below 30%, and avoid opening new accounts before applying.
Save for a Larger Down Payment
Putting 10-20% down improves your approval odds, reduces your interest rate, and shows lenders you have financial reserves — especially important for self-employed borrowers.
Gather All 1099 Forms from 2 Years
Collect every 1099 form you received over the past 2 years. Missing forms can delay your application. Request copies from clients or download from your tax software if needed.
Get a CPA Letter Confirming Self-Employment
A letter from your CPA or accountant confirming your self-employment status, business type, and income history adds credibility to your mortgage application.
Loan Programs for Every Need
We offer a comprehensive range of mortgage products. The right loan depends on your situation, goals, and financial profile — and we'll help you find the perfect fit.
DSCR Loans
Best for: investors qualifying by rental income.
How it works: Approval is based on property cash flow, not personal income.
Key features:
- No personal income docs
- 620+ credit, 20–25% down
- Unlimited properties
Conventional Investment Loans
Best for: strong W-2 investors.
How it works: You qualify using personal income, credit, and assets.
Key features:
- Lowest rates
- 620+ credit (700+ ideal)
- Up to 10 properties
Portfolio Loans Options
Best for: complex or large portfolios.
How it works: Lender creates a custom loan outside standard guidelines.
Key features:
- Flexible underwriting
- Finance 10+ properties
- Relationship-based
Fix & Flip (Bridge Loans)
Best for: renovate-and-sell investors.
How it works: Short-term loan for purchase and rehab, repaid at sale or refi.
Key features:
- Fast closings (7–14 days)
- Based on ARV
- Covers purchase + rehab
Cash-Out Refinance (Investors)
Best for: pulling equity to reinvest.
How it works: Refinance and extract cash from existing property value.
Key features:
- Access up to 75–80% value
- Use funds for any purpose
- DSCR or conventional options
Blanket Loans
Best for: multiple properties.
How it works: One loan covers several properties under one payment.
Key features:
- One loan, one payment
- Finance 5+ properties
- Portfolio consolidation
Short-Term Rental Loans
Best for: Airbnb/VRBO investors.
How it works: Qualify using projected or actual short-term rental income.
Key features:
- DSCR-based
- 20–25% down
- Uses STR income data
Bank Statement Loans
Best for: self-employed borrowers without traditional income docs.
How it works: You qualify using 12–24 months of bank deposits instead of tax returns.
Key features:
- No W-2s or tax returns
- Personal or business statements
- 620+ credit typical
- 10–20% down
1099 Mortgage Questions, Answered
Everything you need to know about getting a mortgage as a 1099 contractor. Can't find your answer? Reach out and we'll help.
15+
Years Experience
23
Day Avg Close
1500+
Happy Clients
Your 1099 Income Can Qualify You
Your 1099 income can qualify you for a home. Let's find the right program for your contractor situation.
Related Resources
Ready to Take the First Step?
Whether you're ready to apply or just have questions, we're here. No pressure, no obligation — just real answers from real people who want to help.
Get Pre-Approved
Start your application in minutes. We'll get back to you within 24 hours with your options
Begin Pre-ApprovalTalk to a Loan Officer
Prefer to talk first? Schedule a call at a time that works for you — or give us a ring right now.