1099 Income Loans

A 1099 income loan is a mortgage program that allows gig workers, freelancers, and independent contractors to qualify using their 1099 income forms instead of traditional W-2 employment. We average your 1099 income over 12 or 24 months to calculate your monthly qualifying income. This program is ideal for borrowers who receive 1099-MISC or 1099-NEC forms from clients or platforms like Uber, Lyft, Upwork, or Fiverr. No tax returns are required—just your 1099 forms and bank statements.

No, you do not need to provide tax returns for a 1099 income loan. We qualify you based solely on your 1099 forms from the past 12 or 24 months. This is particularly beneficial for gig workers who have significant business expense deductions on their tax returns that reduce their taxable income. By using gross 1099 income instead of adjusted gross income from tax returns, you may qualify for a larger loan amount.

Yes, you can absolutely combine income from multiple 1099 sources. Many gig workers have income from several platforms or clients—for example, driving for both Uber and Lyft, or freelancing for multiple companies. We'll add up all your 1099 income from all sources over the 12 or 24 month period and use the total to calculate your monthly qualifying income. Just provide all 1099 forms from each source.

You need a minimum of 12 months of 1099 income history to qualify. However, 24 months of history is preferred and typically results in better interest rates and terms. If you've been doing gig work or freelancing for less than 12 months, you may need to wait until you have a full year of income history, or consider other loan programs like bank statement loans if you also have business bank account deposits.

Income fluctuation is common and expected in the gig economy, and our 1099 loan program is designed to handle it. We use an averaging method (12 or 24 months) specifically to smooth out these fluctuations. If your income varies seasonally or project-to-project, the 24-month average often works better because it captures a full business cycle. The underwriter will review your income trend—stable or increasing income is viewed more favorably than declining income.

The minimum credit score for a 1099 income loan is 620 FICO. However, a score of 640 or higher will qualify you for better interest rates and more favorable terms. If your credit score is below 620, focus on improving it before applying—pay down credit card balances, make all payments on time, and dispute any errors on your credit report. A higher credit score can save you thousands of dollars in interest over the life of the loan.

Down payment requirements for 1099 income loans typically range from 15% to 25%, depending on several factors including your credit score, the property type (primary residence, second home, or investment), and the loan amount. Primary residences generally require lower down payments (15-20%) while investment properties typically require 20-25%. A larger down payment can help you qualify for better interest rates and may offset other risk factors like lower credit scores or higher DTI ratios.

Yes, you can absolutely use 1099 income to purchase an investment property. Investment properties typically require a 20-25% down payment and may have slightly higher interest rates than primary residences. The property's rental income cannot be used in addition to your 1099 income for qualification (you'd need a DSCR loan for that), but your 1099 income alone can qualify you for the investment property loan. Many gig workers and independent contractors successfully build rental property portfolios using 1099 income loans.

Documentation for a 1099 income loan is straightforward: (1) All 1099 forms from the past 12 or 24 months from all income sources, (2) Bank statements for the past 2-3 months showing deposits and reserves, (3) Government-issued photo ID (driver's license or passport), (4) Credit report authorization form, (5) Purchase contract or property information for refinances, and (6) Homeowners insurance quote. You do NOT need to provide tax returns, W-2 forms, or employment verification letters.

Your monthly qualifying income is calculated by adding up all your 1099 income over the chosen period (12 or 24 months) and dividing by the number of months. For example, if you earned $96,000 in 1099 income over the past 12 months, your monthly qualifying income would be $8,000 ($96,000 ÷ 12). If you choose the 24-month option and earned $180,000 over 24 months, your monthly income would be $7,500 ($180,000 ÷ 24). We use gross 1099 income before any deductions.

If you recently transitioned from W-2 employment to 1099 gig work and don't yet have 12 months of 1099 history, you may be able to combine your recent W-2 income with your 1099 income, or qualify using a traditional W-2 loan program if you're still within your first year of self-employment. Alternatively, if you have business bank account deposits from your gig work, a bank statement loan might be a better fit. Our loan officers can review your specific situation and recommend the best program.

Yes, you can refinance your existing mortgage using 1099 income. Both rate-and-term refinances (to lower your rate or change your loan term) and cash-out refinances (to access equity) are available. The same qualification requirements apply: 12-24 months of 1099 income history, 620+ credit score, sufficient equity/down payment, and acceptable DTI ratio. Refinancing with a 1099 income loan can be a great way to lower your payment or pull cash out for business investments, debt consolidation, or home improvements.

The maximum loan amount for 1099 income loans is typically $2,000,000, though higher amounts may be considered on a case-by-case basis for well-qualified borrowers. The actual amount you qualify for depends on your monthly 1099 income, credit score, down payment, existing debts, and the property value. Use our online calculators or speak with a loan officer to get a personalized estimate of your borrowing power based on your specific 1099 income and financial situation.

The typical closing timeline for a 1099 income loan is 30-45 days from application to closing. This is comparable to traditional mortgages. The timeline can be shorter if you have all your documentation organized and ready upfront—complete 1099 forms, bank statements, and clear credit. Delays usually occur when borrowers need to track down 1099 forms from multiple sources or when there are issues with the appraisal or title. Working with an experienced loan officer who specializes in 1099 loans can help expedite the process.

Many 1099 income loans include prepayment penalties, typically lasting 1-5 years. A prepayment penalty means you'll pay a fee if you pay off the loan early (through refinancing or selling the property) during the penalty period. However, prepayment penalty terms vary by lender and loan program—some loans have no prepayment penalty, while others may offer a lower interest rate in exchange for accepting a prepayment penalty. Your loan officer will clearly explain the prepayment terms before you commit to the loan.

If your 1099 income shows a declining trend over the past 12-24 months, it may be more difficult to qualify, as lenders want to see stable or increasing income. However, there are strategies to address this: (1) Provide a written explanation for the decline (e.g., you took time off, switched platforms, or had a slow season), (2) Show recent months trending back upward, (3) Use a shorter averaging period (12 months instead of 24) if recent income is stronger, or (4) Consider waiting a few more months to establish a better income trend before applying.

Yes, if you have both W-2 employment and 1099 gig income, you can use both income sources to qualify for a larger loan amount. The W-2 income will be verified through pay stubs and employment verification, while the 1099 income will be verified through your 1099 forms. This is common for people who have a full-time job and do gig work on the side (e.g., driving for Uber on weekends or freelancing in the evenings). Combining both income sources can significantly increase your purchasing power.

No, you do not need to be a US citizen to qualify for a 1099 income loan. Permanent residents (green card holders) are treated the same as US citizens. Non-permanent residents and foreign nationals may also qualify but may need to provide additional documentation such as a valid visa, work permit, or ITIN (Individual Taxpayer Identification Number). If you're a foreign national earning 1099 income in the US, speak with a loan officer about combining a 1099 income loan with a foreign national loan program.

If you're missing 1099 forms from a client or platform, you have several options: (1) Request copies directly from the client or platform that issued them, (2) Download them from the IRS website if they were filed electronically (most platforms like Uber and Lyft provide electronic access), (3) Request a wage and income transcript from the IRS showing all 1099 income reported to them, or (4) Use bank statements to demonstrate the deposits if 1099 forms are unavailable. It's important to account for all your income sources to maximize your qualifying income.

Both 1099 income loans and bank statement loans are designed for self-employed borrowers, but they use different documentation. A 1099 loan uses your 1099 forms to calculate income, while a bank statement loan uses 12 or 24 months of bank deposits. If you receive 1099 forms and your income is clearly documented that way, a 1099 loan is usually simpler. If you run a business with a business bank account, or if you're paid via direct deposit or checks rather than 1099 forms, a bank statement loan may be better. Some borrowers qualify for both—your loan officer can help you choose the best option.