Your 1099s Show What You Really Earn. We Use That Number.
A 1099 loan counts 100% of your gross 1099 income. No tax returns. No write-off penalty. This page shows the exact math, the credit and down payment rules, and the mistakes that get 1099 files declined at other lenders.
If your tax return makes you look broke and your 1099s make you look rich, you are in the right place.
A 1099 loan is a mortgage that uses the gross income on your 1099 forms to qualify you, instead of the net income on your tax returns. It is built for contractors, real estate agents, consultants, gig workers, and 1099 medical professionals. We count 100% of the 1099 total. Write-offs do not reduce it. The 1099 loan is part of the alternative-income programs we run for self-employed borrowers, and a real underwriter reads every file. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: September 24, 2026
Can You Get a Mortgage With 1099 Income? The Short Answer
As of Q3 2026 (September 2026) (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026): qualifying income is 100% of gross 1099 income for the prior 1 or 2 years plus year-to-date deposits, divided by the number of months, with no expense factor; 1099s are validated against the IRS wage and income transcript; minimum credit 620 (43% DTI and 75% LTV at the floor tier), 660 on Expanded Prime; loans to $3,500,000; LTV up to 89.99%; 2 years of self-employment.
Yes. A 1099 loan qualifies you on 1 or 2 years of 1099 forms plus your year-to-date bank deposits, with no tax returns. We add up 100% of the gross 1099 income, add the deposits so far this year, and divide by the number of months. That is your monthly income. Loans run from $100,000 to $3,500,000, and 10% down is possible with strong credit.
What Is a 1099 Loan?
A 1099 loan is a first mortgage. Same note, same closing, same protections as any home loan. The only thing that is different is how we prove your income.
A regular mortgage uses two years of tax returns. Self-employed people write off mileage, equipment, software, home office, and contractor pay. That is smart at tax time. It is painful at mortgage time, because the lender only sees what is left after the write-offs. A 1099 loan skips the tax return. It uses the gross amount your clients reported to the IRS on your 1099s. We confirm that number with an IRS wage and income transcript, so it is fully documented. It is not a stated-income loan.
If you have big deposits but not much on 1099s, a bank statement loan may fit better. We run both paths and pick the one that gives you the higher income.
How Lenders Calculate 1099 Income for a Mortgage
Here is where most explanations go wrong. They say “lenders average your 1099s.” That is only half of it. The formula has two parts, and the second part is what keeps a strong year from being wasted.
Monthly income = (total gross 1099 income for the prior 1 or 2 years + year-to-date bank statement income) ÷ total number of months. The month count is never less than 12. There is no expense ratio and no write-off adjustment.
Three things make this formula work in your favor. First, it is gross, not net. Second, you choose 1 year or 2 years, and we run both. Third, the year-to-date deposits count at full value, so a strong current year raises your number instead of waiting for next year’s 1099.
A Colorado Springs example: the realtor the bank turned down
A real estate agent near Fort Carson earned $210,000 in commissions last year. Her brokerage 1099 says $210,000. After mileage, marketing, and desk fees, her Schedule C shows $68,000. It is June. Her bank statements show $95,000 in commission deposits since January 1.
Tax-return path (what the bank used)
- Schedule C net: $68,000
- Monthly income: $5,667
- Proposed payment $4,100 + $900 other debts = $5,000
- DTI = 88% → declined
1099 loan path (what we use)
- 1099 gross: $210,000 + YTD deposits: $95,000 = $305,000
- Months: 12 + 6 = 18
- Monthly income: $305,000 ÷ 18 = $16,944
- DTI = 29.5% → approved
Same person. Same money. One path fails and one clears with room to spare. The payment in this example is a round number for illustration, not a rate quote.
One year or two years? We run both.
Say her 1099 the year before was $140,000. The two-year math is ($140,000 + $210,000 + $95,000) ÷ 30 months = $14,833 a month. The one-year math is $16,944. We use the one-year figure. If her older year had been the stronger one, the two-year average would win. The point is that you are not stuck with a bad average when your business is growing.
Want to see your 1099 number before you shop for a home? Send us your 1099s and we run the one-year and two-year math before you sign anything.
Who Qualifies for a 1099 Loan
Anyone whose income shows up on 1099 forms instead of a W-2. The most common files we close:
- Real estate agents and brokers paid by brokerage 1099
- Insurance agents and commission sales reps
- Independent contractors and consultants (IT, engineering, project work)
- 1099 medical professionals: locum tenens physicians, CRNAs, travel nurses, contract therapists
- Gig and platform workers paid on 1099-K (rideshare, delivery, e-commerce sellers)
- Creators and influencers paid by brand sponsors and ad platforms
- Contract attorneys, traveling techs, and anyone else whose clients send a 1099
The history rule: you need to have been self-employed for 2 years, and the business needs to have existed for 2 years. Less than 2 years can work if you have 2 years in the same line of work. A nurse who went from staff to 1099 travel nursing, or a developer who left an agency to consult, usually clears this. Less than 1 year self-employed does not qualify on this program.
1099 Loan Requirements at a Glance
| What we look at | What is needed |
|---|---|
| 1099 history | 1 or 2 years of every 1099 you received (NEC, MISC, K) |
| IRS check | Wage and income transcript pulled by us with a signed 4506-C |
| Year-to-date proof | Bank statements from January 1 through your latest full month |
| Time self-employed | 2 years (2 years in the same line of work can substitute) |
| Business check | A business narrative form and proof the business exists, verified within 10 business days of closing |
| Credit score | 620 is the floor (75% LTV, 43% DTI). 660 opens 80% LTV. 740 opens 10% down |
| Debt-to-income | Up to 50% on the main program |
| Residual income | $2,500 a month left after all bills, plus $150 per dependent (primary and second homes) |
| Reserves | 6 months of payments up to $2,000,000 · 9 months at $2,500,000 · 12 months at $3,000,000 and up · first-time buyers always 6 |
| Loan amount | $100,000 to $3,500,000 |
| Occupancy | Primary home, second home, or 1–4 unit rental |
| Property types | Single-family, PUD, townhome, 2–4 unit, warrantable and non-warrantable condos |
| Loan terms | 15, 30, and 40-year fixed; 5/6 and 7/6 ARMs; interest-only options |
How Much Down Payment Does a 1099 Loan Need?
It depends on your credit score, the loan size, and whether you will live in the home. The table shows the main program. Numbers are the maximum loan-to-value, so 89.99% means about 10% down.
| Scenario | Loan up to | Credit score | Max LTV | Down payment |
|---|---|---|---|---|
| Primary home, purchase | $1,500,000 | 740 | 89.99% | About 10% |
| Primary home, purchase | $1,500,000 | 680 | 85% | 15% |
| Primary home, purchase | $1,500,000 | 660 | 80% | 20% |
| Primary home, purchase | $2,500,000 | 720 | 80% | 20% |
| Primary home, purchase | $3,500,000 | 700 | 70% | 30% |
| Second home | $1,500,000 | 680 | 80% | 20% |
| Rental (1–4 units) | $1,500,000 | 680 | 80% | 20% |
| Primary home, cash-out refinance | $1,500,000 | 740 | 80% | 20% equity kept |
| Credit event in the last 4 years | $1,500,000 | 620 | 75% | 25% |
Gift funds are allowed once you have put in 5% of your own money. Sellers can pay up to 6% of the price toward your closing costs. Down payment assistance programs are not allowed on this program. First-time buyers can use it for a primary or second home and need 6 months of reserves.
Which 1099s Count, and What Does Not
1099-NEC (non-employee compensation)
The most common one. Clients, brokerages, agencies, and staffing companies issue it when they pay you for work. Every 1099-NEC tied to your business counts.
1099-MISC (rents, royalties, other income)
Authors, musicians, software licensors, and some commission setups get these. They count when the income is part of your self-employment.
1099-K (card and platform payments)
Stripe, PayPal, Square, Uber, DoorDash, Etsy, and other platforms issue it. Gig workers and online sellers see most of their income here. It counts.
What does not count
Cash with no 1099 behind it. Gifts. Loan money. Transfers between your own accounts. Refunds and insurance payouts. W-2 wages from another job are handled separately, not folded into the 1099 math. A one-time 1099 that will not repeat can be reduced or excluded. Income from the cannabis industry is not eligible, even in states where it is legal.
Not sure which of your 1099s an underwriter will count? Send them over and we sort them before the file goes in.
How a 1099 Loan Works, Start to Finish
You send your 1099s
Every 1099 from the past 1 or 2 years. PDFs of the forms are fine. We also ask for a short business narrative form that explains what you do and how you get paid.
We match them to the IRS
You sign a 4506-C. We pull your IRS wage and income transcript and confirm the 1099 totals match what was reported. This is why the loan is fully documented, not stated.
You send year-to-date bank statements
January 1 through your latest full month. This shows the income is still coming in and lets this year’s deposits count in the math.
We run the math both ways
One-year and two-year. We use the higher result and check it against your debts, reserves, and residual income before the file is submitted.
A real underwriter reads it
This program is not run through an automated approval system. A person reviews the income, the business, and the credit story. That is why a file with a good explanation clears here when a computer elsewhere said no.
Business check and closing
Within 10 business days of closing we confirm the business exists through a CPA, a state licensing bureau, or a Secretary of State listing. Then you sign. Same closing table as any mortgage.
1099 Loan vs. Bank Statement Loan vs. Regular Mortgage
| What is different | 1099 loan | Bank statement loan | Regular mortgage |
|---|---|---|---|
| Income proof | 1–2 years of 1099s + YTD deposits | 12 or 24 months of deposits | 2 years of tax returns |
| Expense haircut | None. 100% of gross | Business statements: 50% fixed, or a CPA expense letter | All write-offs subtracted |
| IRS check | Yes, wage and income transcript | No | Yes, full 1040 transcripts |
| Lowest score | 620 | 620 | 620 typical |
| Max loan | $3,500,000 | $3,500,000 | County conforming limit, then jumbo |
| Best for | Paid by clients who issue 1099s | Paid by cash, card, or many small customers | Tax returns already show enough income |
Not sure which one fits? Read the side-by-side on 1099 vs. bank statement loans, or send us both sets of documents and we will tell you which path gives the higher number.
1099 Loan Myths, Corrected
❌ Myth: “A 1099 loan is just a stated-income loan with a new name.”
✅ Fact: Every 1099 is matched to your IRS wage and income transcript. The income is verified by the IRS record, not by what you state.
❌ Myth: “1099 workers can’t get a mortgage.”
✅ Fact: 1099 income qualifies at 100% of gross on this program. The problem was never your income. It was the paperwork the other lender chose to use.
❌ Myth: “I need all my 1099s from one client.”
✅ Fact: Eight clients, three agencies, two brokerages. All fine. Many sources is normal and often a strength, because no single client can end your income.
❌ Myth: “You need two full years of 1099s no matter what.”
✅ Fact: One year of 1099s plus year-to-date deposits is allowed. And if you moved from W-2 to 1099 in the same line of work, your W-2 years count toward the 2-year history.
❌ Myth: “1099 loans are only for people who make a lot.”
✅ Fact: Loans start at $100,000. What matters is that the 1099 income is steady and the math clears the payment, not the size of the number.
❌ Myth: “The rate must be terrible.”
✅ Fact: Pricing is set by credit score, loan-to-value, and loan size, like any mortgage. A 740 score with 20% down prices well. We do not publish rates because they change daily. We quote them on your actual file.
Why 1099 Borrowers Work With Us
If another lender said no, that is usually where our work starts. Most 1099 declines we see come from three mistakes: the lender used tax returns when 1099s would have cleared; the lender averaged two years when one year was stronger; or the file went into an automated system with no one to explain the business. We fix all three before the file is submitted. We also check your residual income and reserves up front, so the approval you get is one that closes.
We run 1099 files for real estate agents in Colorado Springs, travel nurses on assignment, consultants who bill ten clients, and creators paid by platforms. Same math every time. Lending in 49 states. New York excluded.
1099 Loan Frequently Asked Questions
What is a 1099 loan?
A 1099 loan is a home mortgage that uses 1 or 2 years of your 1099 forms as proof of income instead of tax returns. We count 100% of the gross 1099 total, add your year-to-date bank deposits, and divide by the months to get your monthly income. Every 1099 is matched to your IRS wage and income transcript, so the loan is fully documented.
Can you get a mortgage with 1099 income?
Yes. 1099 income qualifies at 100% of gross on a 1099 loan. You need 1 or 2 years of 1099s, year-to-date bank statements, a 2-year self-employment history, and a credit score of 620 or higher. Write-offs on your tax return do not reduce the income we use.
How many years of 1099s do you need for a mortgage?
One or two years. Most people use two for a smoother average. If your latest year is your best, one year plus your year-to-date deposits usually gives a higher number. We run both and use the higher result. You still need to have been self-employed for 2 years, or 2 years in the same line of work.
Do 1099 loans require tax returns?
No. No 1040s, no Schedule C. You sign a 4506-C so we can pull an IRS wage and income transcript, which lists the 1099s reported under your Social Security number. That transcript is what we use to confirm your 1099 totals. Your deductions never enter the math.
How do lenders calculate 1099 income for a mortgage?
Total gross 1099 income for the prior 1 or 2 years, plus year-to-date income from your bank statements, divided by the total number of months (never fewer than 12). For example, $210,000 in 1099s plus $95,000 in deposits over 6 months this year is $305,000 ÷ 18 months = $16,944 a month. No expense ratio is applied.
What credit score is needed for a 1099 loan?
620 is the floor, at 75% loan-to-value and a 43% debt ratio. A 660 score opens 80% loan-to-value and a 50% debt ratio. A 740 score with a loan up to $1,500,000 opens 89.99% loan-to-value, which is about 10% down. Larger loans need higher scores and more reserves.
How much down payment does a 1099 loan need?
About 10% with a 740 score on a primary home up to $1,500,000. 15% with a 680 score. 20% with a 660 score, and 20% on second homes and rentals. Loans above $2,500,000 need 25% to 30% down. Gift funds are allowed after you put in 5% of your own money.
Can a 1099 employee get a mortgage?
Yes. A “1099 employee” is really a contractor, so lenders treat you as self-employed. On a 1099 loan that works in your favor. You qualify with 1 or 2 years of 1099s, year-to-date bank statements, and a signed 4506-C. You do not need a W-2 or an employer to call.
Can I use 1099 income if I also have a W-2 job?
Yes. The 1099 income is figured with the 1099 formula, and the W-2 income is documented separately with pay stubs and W-2 forms. They are added together. If most of your money is W-2 and the 1099 work is a side job, a regular mortgage may be the better fit. We check both.
I switched from W-2 to 1099 this year. Can I still qualify?
Often, yes. The program wants 2 years of self-employment, but less than 2 years is allowed when you have 2 years in the same line of work. A staff nurse who became a 1099 travel nurse, or an employee who now consults in the same field, usually clears this. Less than 1 year of self-employment does not qualify.
Can real estate agents use a 1099 loan?
Yes, and they are one of the most common files we close. Your brokerage 1099 covers the year’s commissions. We count 100% of it plus your year-to-date commission deposits. Agents get declined elsewhere because the tax return looks small after mileage and marketing. The 1099 path uses the gross instead.
Can I refinance or take cash out with 1099 income?
Yes. Both rate-and-term and cash-out refinances are allowed with 1099 income. Cash-out on a primary home goes to 80% loan-to-value with a 740 score. The property must have been owned for 6 months, and cash-out amounts are capped by loan-to-value. Texas primary homes follow the state’s home equity rules.
Is a 1099 loan the same as a bank statement loan?
No. A 1099 loan uses your 1099 forms at 100% of gross and checks them against the IRS. A bank statement loan uses 12 or 24 months of deposits, and business statements get an expense haircut, usually 50%. Both skip tax returns. If your clients issue 1099s, the 1099 loan almost always gives the higher income.
Does a computer approve a 1099 loan?
No. This program is not run through an automated approval system. A real underwriter reads the 1099s, the transcript, the bank statements, and your business narrative. That is why a file with a good explanation clears here when a computer at another lender said no.
What is the maximum loan amount on a 1099 loan?
$3,500,000 on a primary home with a 700 score and 30% down. $3,000,000 goes to 75% loan-to-value with a 720 score. Second homes and rentals go to $3,000,000. The minimum loan is $100,000. Reserves rise with loan size: 6 months up to $2,000,000, 9 months at $2,500,000, and 12 months at $3,000,000 and up.
Related Pages
1099 vs. Bank Statement Loan
Bank Statement Loans
1099 Loan FAQ Hub
Self-Employed Income Rules
Colorado Springs Home Loans
View All Loan Options →
About the Author
J.D. Peck is an Area Manager and Mortgage Loan Originator (NMLS #314883) with the JD.Mortgage Team at Paramount Residential Mortgage Group, Inc. (NMLS #75243), based in Colorado Springs. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: September 24, 2026. 1099 loan facts sourced from investor guidelines on file. Program limits change; we confirm current terms on your file before you rely on any figure shown.
See Your 1099 Number Before You Shop
Send us your 1099s and year-to-date statements. We run the one-year and two-year math, check reserves and residual income, and tell you what you qualify for before a seller ever sees your offer.
Source: JD.Mortgage Team at PRMG, 1099 Loans: Qualify With Your 1099s, Not Your Tax Returns, updated September 2026, https://jd.mortgage/1099-loans/
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