How to Qualify for a Mortgage Using Your 1099s (No Tax Returns Required)
For the millions of Americans who have traded the 9-to-5 for the “Gig Economy” or independent contracting, the path to homeownership has historically been a bumpy one. You might have a thriving business and a healthy bank account, but because of the way you maximize your legal tax deductions, your “taxable income” often looks too low for a traditional bank to approve.
Enter the 1099 Mortgage Loan.
This specialized loan program is designed specifically for freelancers, independent contractors, and gig workers. Instead of scrutinizing your tax returns and seeing the “bottom line” after all your business expenses are deducted, we look at your gross income as reported on your 1099 forms.
Why Choose a 1099 Loan?
- Write-Offs Won’t Hurt You: Traditional lenders use your net income after deductions. We use your gross 1099 earnings, significantly increasing your buying power.
- Simplified Paperwork: Say goodbye to the endless piles of tax transcripts and P&L statements. We typically only need your 1099s from the last 1–2 years.
- Flexible Eligibility: Whether you’re a consultant, a creative freelancer, or a tech contractor, this program acknowledges that your “stability” looks different than a W-2 employee’s—but it’s just as valid.
What You’ll Need to Qualify
While every borrower’s situation is unique, the general requirements for a 1099 loan usually include:
- Work History: At least two years of self-employment in the same industry.
- Credit Score: Usually a minimum of 620 (though higher scores unlock better rates).
- Consistency: 1099 forms from the most recent one or two calendar years.
- Down Payment: Typically starts at 10%, depending on your credit profile.
Don’t let your tax strategy stand in the way of your dream home. If you’re ready to be evaluated on what you actually earn, not just what you pay taxes on, a 1099 loan might be your perfect match.