1099 income loans
Mortgage financing that qualifies you based on your 1099 forms rather than tax returns. Built for independent contractors, freelancers, and gig economy workers whose W-2 income does not tell the full story.
What is a 1099 income loan?
A 1099 income loan is a mortgage product that uses your 1099 tax forms as the primary proof of income. If you work as an independent contractor, consultant, or freelancer, you receive 1099-NEC or 1099-MISC forms from your clients at the end of each year. These forms document what you were paid before any deductions.
Traditional mortgage underwriting typically relies on tax returns, which show your income after business write-offs. For many self-employed borrowers, that number is significantly lower than what they actually bring in. A 1099 loan program addresses that gap by looking at your gross 1099 income as the starting point for qualification.
Why borrowers choose it
- Qualify using 1099 forms from your clients instead of full tax returns
- Income is typically recognized closer to gross, not reduced by Schedule C deductions
- Works for borrowers with multiple 1099 income streams from different sources
- Available for purchase and refinance on primary residences, second homes, and investment properties
At a glance
| Income method | 1099 forms (typically 1 or 2 years of history) |
|---|---|
| Borrower type | Independent contractors, freelancers, gig workers, consultants |
| Property type | Primary residence, second home, or investment property |
| Use case | Purchase or refinance without traditional tax return documentation |
How 1099 qualification differs from W-2
With a W-2 loan, the lender sees exactly what your employer paid you and can verify it directly. With a 1099 loan, the lender collects your 1099 forms from one or two years and uses the reported amounts to calculate qualifying income. Some programs apply an expense factor, but the starting number is still your gross earnings rather than your adjusted gross income from a tax return.
This means if you earned $150,000 across your 1099 clients but your Schedule C shows $85,000 after deductions, the 1099 program starts its math from a much higher figure. That difference can be the gap between qualifying and not qualifying for the home you want.
Good fit for
Independent contractors, rideshare drivers, delivery workers, real estate agents, freelance designers and developers, consultants, and anyone whose primary income comes from 1099 sources. If you receive 1099 forms totaling enough income to support a mortgage and you have reasonable credit, this program is worth exploring.
If you are a W-2 employee with straightforward income, a conventional or government-backed loan will likely offer better rates and terms. This product exists specifically to bridge the documentation gap for non-W-2 earners.
Abel Medero, NMLS #1010813. VMA Lending, LLC, NMLS #2734596. Licensed mortgage broker, State of Florida. This is not a commitment to lend. All loan programs are subject to borrower and property qualifications. Rates, terms, and conditions are subject to change without notice. Not all applicants will qualify. 1099 income mortgage programs use alternative income documentation and are subject to lender-specific guidelines and credit review. Equal Housing Opportunity.