1099 Income Loans
Qualify directly off your 1099s — for independent contractors and gig earners who are paid as non-employees.
Tanner & Zac Cook NMLS #2090424 / #2111496Cornerstone First Mortgage, LLC NMLS #1738554.89 · 45 reviews of Tanner Cook on Experience.comShort answer
A 1099 income loan is a non-QM mortgage that qualifies independent contractors, agents and gig workers on one or two years of 1099 forms instead of tax returns. Most 1099-only programs start from your gross 1099 earnings and subtract a fixed expense factor (commonly 10%); some investors use a different factor. The result becomes your monthly qualifying income.
Written by Tanner Cook, NMLS #2090424 · Updated
What is a 1099 income loan?
A 1099 income loan is a non-QM home loan that qualifies you on the 1099 forms your clients issue, rather than on the Schedule C net income left after your write-offs. It suits independent contractors, real estate agents, commissioned reps and platform earners whose 1099s show steady work. The lender still verifies the 1099s, your credit and your assets, and confirms the work is likely to continue.
Built for independent contractors, commissioned reps, and gig-economy earners who receive most of their income on 1099s.
You get a stack of 1099s every January instead of a W-2. Maybe you're a real estate agent, a traveling nurse on contract, a rideshare-and-delivery earner, or a freelance creative with a handful of steady clients. Your income is real and documented — the IRS certainly thinks so — but the moment you write off your mileage, gear, and home office on Schedule C, your tax return shows a number that doesn't reflect what you actually earn.
A 1099 income loan lets you qualify off the 1099s themselves. Instead of dragging the underwriter through two years of returns and a transcript, the lender uses one to two years of your 1099s to establish qualifying income. It is one of the cleanest paths for contractors whose income is well-documented on those forms but obscured by legitimate deductions.
What does a 1099 income loan require?
- What you provide:
- One or two years of 1099 forms, plus evidence the work is continuing, such as a current contract, client letter or recent deposits.
- History needed:
- One or two years of 1099s, depending on the investor and your profile.
The guideline parameters for this program are below. Guidelines subject to change without notice.
- Minimum FICO
- 660+
- Income documentation
- 1 to 2 years of 1099s only (no tax returns, no 4506-C)
- Max LTV / loan amount
- Up to 90% to $1M · 85% to $3M
- Cash-out
- Available
- Rate structure
- Fixed-rate or adjustable-rate, with an interest-only option for some files
- Eligible borrowers
- U.S. citizens, permanent residents, and eligible non-permanent residents
- Occupancy
- Primary residences, second homes and investment properties
- Eligible properties
- Single-family, townhome, condo, pre-construction, and non-warrantable condo
- Title / vesting
- Individual or LLC vesting permitted
How is income calculated on a 1099 income loan?
Most 1099-only programs start from your gross 1099 earnings and subtract a fixed expense factor (commonly 10%); some investors use a different factor.
Gross 1099 earnings minus an expense factor
Most 1099-only programs start from your gross 1099 earnings and subtract a fixed expense factor (commonly 10%); some investors use a different factor. The factor stands in for a contractor’s cost of doing business, which is usually smaller than a full operating company’s, and the write-offs on your tax return are not used. The remaining figure, converted to a monthly amount, is the income the loan is underwritten against.
Using two years generally produces an average, which protects you if one year was unusually strong or weak. A single strong recent year can sometimes stand on its own with the right investor. We look at both and use the presentation that most accurately reflects your earning power.
Why 1099s are cleaner than bank statements for some borrowers
If your income arrives as a handful of large 1099 payments rather than hundreds of small deposits, qualifying off the forms is simpler than reconciling a year of bank activity. There is a single documented gross figure to work from, and the IRS copy of the 1099 is hard to dispute. Borrowers with commingled personal and business banking often find the 1099 path avoids a lot of deposit-by-deposit explanation.
What you bring to the table
Plan on one to two years of 1099s, evidence of continued work in the same line (a current contract, client letters, or recent deposits that tie to the 1099s), plus the standard asset verification for down payment and reserves. Credit is pulled, and because this is an ability-to-repay loan, the underwriter confirms the income is stable and likely to continue.
1099 income loan vs. conventional: which fits you?
Here is how a 1099 income loan compares to the conventional route — and to its closest sibling, the bank statement program.
| Feature | 1099 Income Loans | Conventional loan |
|---|---|---|
| Income proof | 1099 Income Loans1 to 2 years of 1099s | Conventional loanTwo years of tax returns + 4506-C |
| Effect of Schedule C write-offs | 1099 Income LoansGross 1099 earnings minus a fixed expense factor, not net taxable income | Conventional loanWrite-offs reduce qualifying income |
| Minimum FICO | 1099 Income Loans660+ | Conventional loanTypically 620+ |
| Loan amounts | 1099 Income LoansUp to 90% to $1M · 85% to $3M | Conventional loanConforming / high-balance limits |
How does a conventional loan treat 1099 income?
Independent contractors are paid on Form 1099-NEC, which the IRS uses to report nonemployee compensation, and that income usually lands on Schedule C of your tax return. On a conventional loan, Fannie Mae has the lender analyze self-employment income from your tax returns with a cash flow analysis and generally looks for a two-year history (Selling Guide B3-3.5-01), so Schedule C write-offs reduce the income that counts, apart from a short list of non-cash items that are added back (B3-3.6-03).
A 1099 income loan skips the tax return. It starts from the gross on your 1099s and subtracts the investor’s fixed expense factor instead of your actual write-offs.
Compare with related programs
If your income is not fully captured on 1099s — cash-heavy or many small clients — bank statements may reflect it better.
If you are actually a contractor paid consistently by one employer who will verify your work, a written verification of employment can be even simpler.
See all eight side by side in the self-employed loan program comparison.
What are the trade-offs of a 1099 income loan?
- A 1099 income loan usually costs more than a conventional loan, because non-QM loans aren’t backed by Fannie Mae or Freddie Mac.
- An expense factor is subtracted from your gross 1099 earnings, so qualifying income is less than your 1099 total.
- Income that doesn’t appear on your 1099s, such as cash or business-account revenue, isn’t captured.
When is a 1099 income loan not a fit?
- Most of your income runs through your own business account rather than 1099s. A bank statement loan may capture it better.
- Your 1099 work has stopped or is about to change; the lender needs to see it continuing.
- Your tax returns already support the income you need. Conventional financing will usually cost less.
1099 income loan FAQs
Can a 1099 income loan qualify me with just my 1099s?
Yes, a 1099 income loan qualifies you on one to two years of 1099s instead of tax returns. No 4506-C transcript is required. The lender still verifies assets, credit, and ability to repay.
Is my qualifying income on a 1099 income loan my full 1099 total?
No, a 1099 income loan doesn’t use your full 1099 total. Most 1099-only programs start from your gross 1099 earnings and subtract a fixed expense factor (commonly 10%); some investors use a different factor.
How many years of 1099s do I need for a 1099 income loan?
A 1099 income loan uses one to two years of 1099s, depending on the investor and your profile. Two years lets the underwriter average your income; a single strong year can work in some cases.
What credit score do I need for a 1099 income loan?
The program starts at a 660 FICO. Higher scores can improve your loan-to-value tier and pricing.
How much can I borrow with a 1099 income loan?
Up to 90% loan-to-value to $1M and 85% to $3M. Larger loans require a larger down payment.
Can real estate agents use a 1099 income loan?
Yes, real estate agents are a classic fit for a 1099 income loan because commission income is documented on 1099s but often reduced by business write-offs on the return.
Can I buy an investment property with a 1099 income loan?
Yes, a 1099 income loan can be used for primary residences, second homes, and investment properties.
Can a 1099 income loan use just this year if my income jumped?
Often, yes: a 1099 income loan can use a one-year presentation to capture recent growth, or a two-year average for stability. We use whichever the guidelines allow and which reflects you most accurately.
Do gig and platform earners qualify for a 1099 income loan?
Gig and platform earners can qualify for a 1099 income loan if the platform income is reported on 1099s and shows continuity. Some gig earners fit the bank statement program better, and we compare both.
Can I do a cash-out refinance with a 1099 income loan?
Yes, cash-out is available on this program subject to the applicable loan-to-value limits.
Guideline notes
July 2026 update: 1099-based qualification remains a core non-QM offering, with investors accepting either one or two years of 1099s depending on your profile. This is a strong fit for the growing 1099 workforce — agents, healthcare contractors, and platform earners — who previously got pushed into full tax-return underwriting.
Expect the underwriter to apply an expense factor to your 1099 gross to arrive at qualifying income, and to want the 1099s to reconcile with recent deposits. Program availability and guidelines are subject to change without notice.
Guides for 1099 income loans
- Home Loans for 1099 Contractors and Freelancers
- Home Loans for Real Estate Agents and Commission-Based Earners
- Mortgages for Gig Workers and Side Hustlers
- Can You Get a Mortgage Without Tax Returns? Yes — Here's How
- Self-Employed Less Than Two Years? Your Mortgage Options
- Self-Employed Mortgage Options Compared (2026)
Sources
Federal rules and agency guides referenced on this page. Non-QM investors set their own guidelines, which vary by investor.
- IRS: About Form 1099-NEC, Nonemployee Compensation (opens in a new tab)
- Fannie Mae Selling Guide B3-3.5-01: Underwriting Factors and Documentation for a Self-Employed Borrower (opens in a new tab)
- Fannie Mae Selling Guide B3-3.6-03: Income or Loss Reported on IRS Form 1040, Schedule C (opens in a new tab)
- CFPB: 12 CFR 1026.43, minimum standards for transactions secured by a dwelling (ability-to-repay rule) (opens in a new tab)
Talk to the Cook Brothers Mortgage Team about your file
We check your scenario in-house against the 25+ non-QM investor programs we underwrite to, then run your file against the guidelines of the one that fits. Start with the two-minute qualifier or reach out directly.
Non-QM loan programs. Alternative income documentation required. All loans subject to underwriting approval, income/asset verification, and ability-to-repay determination. Not all applicants will qualify. Program availability and guidelines subject to change without notice.