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1099 Mortgage Loans: Your 1099s Are Enough
A 1099 mortgage qualifies you on the 1099 forms your payers already file — no tax returns, no write-off penalty. It's the cleanest fit for independent contractors whose income arrives from a handful of companies: realtors, nurses and travel medical staff, IT consultants, drivers, tradespeople, and freelancers. The lender reads the gross figure your 1099s report, trims a modest expense factor, and that's your income.
How the math works
- Gather 1099s — most programs use one or two years' worth; multiple payers can be combined.
- Apply the expense factor — commonly around 10%, or a different rate your CPA documents. This stands in for your business expenses without itemizing them.
- Divide by the months — the result is your qualifying monthly income. Example: $180,000 of 1099s over 12 months × 90% ≈ $13,500/month.
Compare that with conventional underwriting, where the same contractor might show $85,000 of taxable income after mileage, home office, equipment, and retirement deductions — and qualify for roughly half the house.
What you'll typically need
- History: 1–2 years of 1099 income in the same line of work
- Down payment: commonly 10–20%
- Credit: mid-600s and up; better scores buy meaningfully better pricing
- A CPA letter in some programs, confirming your expense rate and self-employment status
1099 loan vs. bank statement loan
Both dodge the tax-return problem; they read different evidence. If your income lands as a few clean 1099s, the 1099 program is simpler and often prices similarly. If you run a business with many small revenue streams, cash deposits, or platform payouts that don't all generate 1099s, the bank statement route usually paints the stronger picture. A specialist will run both and take the better number — that's the whole job.
The honest part
Like all alternative-documentation loans, 1099 programs price above conventional — generally in the one-to-two-point range depending on credit and down payment. If your write-offs are light and your returns already support the loan, conventional is cheaper; a good specialist checks that first. And these are fully regulated mortgages: ability-to-repay rules still apply, which is why the expense factor exists rather than lenders taking your gross at face value.
Frequently asked questions
What is a 1099 mortgage loan?
A program that qualifies contractors on their 1099 totals (minus a small expense factor) instead of tax returns after deductions.
How much of my 1099 income counts?
Typically around 90% — the standard 10% expense factor — or a different rate your CPA documents.
Can I combine 1099s from multiple companies?
Usually yes, as long as the work history is consistent — realtors with several brokerages, nurses across agencies, consultants with multiple clients.
I have one year of 1099 income. Enough?
Some programs accept 12 months, especially with prior W-2 history in the same field. Two years opens more doors and better pricing.