Virginia Self-Employed Mortgage 2026

Northern Virginia Contractors: Qualify on Your 1099s, Not Your Write-Offs

Federal contract work pays well, but corp-to-corp and 1099 returns look thin after deductions. We show how Virginia contractors qualify on gross 1099 income or bank deposits, up to $1,249,125 conforming territory and beyond.

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In Northern Virginia, the contractor billing $180,000 a year often files a return that says $90,000, and most lenders stop reading at the return.

A Virginia self-employed mortgage is a home loan that qualifies business owners on bank statements, 1099s, or a CPA P&L instead of tax returns. It fits the independent government contractor in Reston or Arlington, the corp-to-corp consultant in Fairfax, the Richmond tradesperson, and the Virginia Beach charter or rental operator. Your return is built to lower taxes. Our job is to show what your business really brings in. The JD.Mortgage Team at PRMG writes Virginia self-employed loans from 620 FICO (Non-Prime) and 660 FICO (Expanded Prime), with 12 or 24 months of statements. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.

Last updated: September 24, 2026

Virginia Self-Employed Mortgage: The Short Answer

Self-employed in Virginia and turned down because of your tax return? The fix is a different yardstick. We measure income from your deposits, your 1099s, or a 12-month CPA P&L. Scores start at 620, and most files need 2 years in business.

As of Q3 2026 (September 2026): Self-employed borrowers qualify with a 620 credit score on Non-Prime terms (75% LTV, 43% DTI) or 660 on Expanded Prime terms (80% LTV, 50% DTI) (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026). Business bank statements count deposits after a fixed 50% expense factor, and 1099 income counts at 100% of gross (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026). The top loan amount is $3,500,000 (PRMG Non-QM Income Qualifying Product Profile, 09/17/2026). The 2026 conforming loan limit in Virginia is $832,750 in most counties, up to $1,249,125 in Northern Virginia (FHFA 2026 conforming loan limits).

Who Uses Self-Employed Loans in Virginia

Independent government contractors on 1099

Northern Virginia runs on federal contracts. Many cleared analysts, engineers, and program managers work as independent contractors paid on a 1099 through a prime or a staffing firm. Their gross pay is high. Their deductions for equipment, travel, and a home office are high too. The 1099 path fits best. We use 100% of gross 1099 income plus YTD income, averaged, with an IRS transcript to back it up. Contract gaps between task orders happen. We look at the full year, not one slow month.

Corp-to-corp consultants with their own S-corp

Corp-to-corp means the client pays your company, and your company pays you. On paper you get a modest W-2 salary plus distributions. Lenders who only count the W-2 miss half your pay. For these borrowers we use 12 or 24 months of business bank statements with the 50% expense factor. You need at least 25% ownership of the business. If your CPA can document a lower expense ratio, we can use that instead.

Richmond and Hampton Roads trades

Electricians, HVAC techs, and remodelers around Richmond and Chesapeake bill customers directly and deposit checks into a business account. Their busy season and slow season swing hard. We may ask for 24 months of statements so the seasonal pattern averages out. The CPA P&L path also works if a CPA, EA, or CTEC preparer signs a 12-month P&L and your deposits land within 35% of the P&L revenue.

Virginia Beach short-term rental and charter operators

Coastal owners who run rentals or boat charters often have income that looks like a lump every summer. For a rental purchase, a DSCR loan qualifies on the property’s rent, not personal income. For the owner’s own home, personal or business bank statements show the full year. If you already own and want cash without touching a low first-mortgage rate, see our Virginia HELOC page. Veterans who run a business can also compare our Virginia VA loan page.

Bank Statements, 1099s, or a P&L: Which One Reads Your Income

Match the document to the way money reaches you. Steady deposits point to bank statements. Client 1099s point to the 1099 path. Clean books kept by a CPA point to the P&L.

If this sounds like you	Start here	Score floor
Money lands in your account every week	Bank statements	620 / 660
Clients send you 1099s	1099 income	620 / 660
A CPA already keeps your books	CPA P&L	660 with 2 months of statements
Large savings, uneven income	Asset utilization	660

Deep dives: bank statement loans, 1099 loans, P&L loans, asset utilization. Buying a rental? DSCR loans qualify on the rent.

Not sure which path reads your Virginia income best? We run every path you qualify for and show you the strongest number.

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How Virginia Taxes Shape a Self-Employed Return

Virginia uses a graduated income tax. The top bracket is 5.75% on taxable income over $17,000, set in Va. Code § 58.1-320. That bracket has not moved since 1990, so almost every working contractor pays the top rate on most of their income. The result is simple. Every dollar a contractor can write off saves federal tax, self-employment tax, and 5.75% state tax. Contractors write off a lot.

Then there is the local layer. Virginia lets cities and counties levy a BPOL tax (Business, Professional and Occupational License tax) under Va. Code § 58.1-3703. BPOL is measured by gross receipts, not profit. A consultant who bills through an LLC in Fairfax County or Arlington pays a license tax on revenue, then deducts it on the return. It is one more line that pulls net income down.

Tax layer	What it hits	Effect on your return
State income tax	Taxable income, 5.75% top bracket	Pushes you to deduct everything
Local BPOL tax	Gross receipts, set by each locality	Deducted as a business expense
Corp-to-corp S-corp setup	Salary vs. distributions	W-2 from your own company looks small

Here is where most lenders go wrong. They read the Schedule C bottom line, or the small W-2 you pay yourself from an S-corp, and call that your income. We do not. With 1099 qualifying we use 100% of gross 1099 income plus year-to-date deposits, checked against an IRS transcript. With business bank statements we take 12 or 24 months of deposits and apply a fixed 50% expense factor. BPOL, mileage, and home-office deductions never touch that math.

A Fairfax Example: The 1099 Contractor the Tax Return Undersells

Tax return view (example)

Schedule C net profit: $96,000 a year
Monthly income: $8,000
Example housing payment: $5,600
Other monthly debts: $900
DTI = $6,500 / $8,000 = 81.25% (declined)

Our 1099 view (example)

Gross 1099 income: $186,000 a year
Monthly income: $186,000 / 12 = $15,500
Example housing payment: $5,600
Other monthly debts: $900
DTI = $6,500 / $15,500 = 41.94% (fits under 43%)

This is a cleared systems engineer in Fairfax paid on a 1099. The return shows $96,000 after equipment, travel, BPOL, and home office. We use 100% of the $186,000 gross, confirmed by an IRS transcript. At 41.94%, the file fits even the 43% DTI cap that comes with a 620 score.

Checklist: Virginia Self-Employed Loan Basics

Checklist item	Standard
Proof of business	2 years self-employed, business in place 2 years
Minimum score	620 (75% LTV) or 660 (80% LTV)
Top loan-to-value	89.99% at 740 on a primary home
Maximum loan	$3,500,000 at 70% LTV and a 700 score
Reserves	3 months (Non-Prime) to 6 months (Expanded Prime)
Occupancy	Primary, second home, or investment

Figures: PRMG Non-QM Income Qualifying Product Profile, 09/17/2026.

Buying a Home in Virginia: Loan Limits, Recordation Tax, and Acreage

Virginia has two loan-limit worlds in 2026. FHFA sets the one-unit conforming limit at $1,249,125 in Arlington, Clarke, Culpeper, Fairfax, Fauquier, Loudoun, Prince William, Rappahannock, Spotsylvania, Stafford, and Warren counties, plus the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park. Madison County sits at $1,209,750. Every other Virginia county and city is at the $832,750 baseline.

Our self-employed loans are not bound by those limits. Loans run from $100,000 to $3,500,000. The $3.5 million top needs 70% LTV and a 700 score. That matters in Great Falls, McLean, or Old Town, where prices pass the conforming line fast.

At closing, Virginia charges a state recordation tax of 25 cents per $100 of the price or the property value, whichever is greater, under Va. Code § 58.1-801. Localities can add their own share. Budget for it in cash to close.

Two more Virginia realities. Condos in Arlington, Alexandria, and Reston are common. Warrantable condos go to 89.99% LTV at 740, and non-warrantable condos cap at 80%. Out in Fauquier, Loudoun horse country, and the Shenandoah Valley, big parcels are normal. Our cap is 15 acres for a primary or second home and 5 for an investment property, and rural property maxes at 80% LTV. A 40-acre farm will not fit. A 12-acre homesite can.

Virginia Self-Employed Mortgage Myths, Corrected

❌ Myth: “I’m a 1099 contractor on a federal contract. I have to go back to W-2 before I can buy.”

✅ Fact: No. We qualify Virginia contractors on 100% of gross 1099 income plus year-to-date income, verified with an IRS transcript. Two years self-employed is the standard, and 1 to 2 years may work if you have 2 years in the same line of work.

❌ Myth: “Self-employed loans need 25% down.”

✅ Fact: At a 660 score, Expanded Prime goes to 80% loan-to-value, and a 740 score reaches 89.99% on a primary home. Down payment follows your score and file, not your job title.

❌ Myth: “I have to amend my taxes to show more income.”

✅ Fact: No. These programs never read your tax return. Amending to look bigger usually costs you money for nothing.

Turned down in Virginia because of your tax return? Send us your statements. We tell you what they support before you make an offer.

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Virginia Self-Employed Mortgage Frequently Asked Questions

Can I get a mortgage if I’m self employed in Virginia?

Yes. We qualify Virginia business owners on 12 or 24 months of bank statements, gross 1099 income, or a CPA-prepared P&L instead of tax returns. The minimum score is 620 for Non-Prime (75% LTV, 43% DTI) and 660 for Expanded Prime (80% LTV, 50% DTI). You generally need 2 years self-employed.

Can a 1099 government contractor in Northern Virginia get a mortgage?

Yes. We use 100% of your gross 1099 income plus year-to-date income, averaged, and confirm it with an IRS transcript. Your deductions do not lower that number. Contract gaps between task orders are reviewed across the full year, so one slow month does not sink the file.

What is the conforming loan limit in Fairfax County for 2026?

The 2026 one-unit limit in Fairfax County is $1,249,125, per FHFA. The same limit applies in Arlington, Loudoun, Prince William, and the cities of Alexandria and Fairfax. Our self-employed loans go past that, from $100,000 up to $3,500,000, with the top amount at 70% LTV and a 700 score.

Does Virginia’s BPOL tax hurt my mortgage approval?

No. BPOL is a local license tax on gross receipts, so it lowers the net income on your return. We do not use that net number. Business bank statement loans take your deposits times a fixed 50% expense factor, and 1099 loans use gross 1099 income. BPOL never enters the math.

Can I get a mortgage in Virginia without tax returns?

Yes. In Virginia we qualify self-employed borrowers on 12 or 24 months of bank statements, gross 1099 income, or a 12-month CPA profit and loss statement. Tax returns are not used. You need 2 years of self-employment and at least a 620 credit score.

What credit score do I need for a bank statement loan?

620 is the minimum on Non-Prime terms, capped at 75% loan-to-value and 43% debt-to-income. At 660 you move to Expanded Prime with up to 80% loan-to-value and 50% debt-to-income. A 740 score reaches 89.99% on a primary home.

How do you calculate income from business bank statements?

We average your business deposits over 12 or 24 months and apply a fixed 50% expense factor. If your CPA or tax preparer writes an expense statement showing lower costs, we can use that instead. You must own at least 25% of the business.

How much can I borrow on a self-employed mortgage?

Loans run from $100,000 to $3,500,000. The top amount needs 70% loan-to-value and a 700 score. Your qualifying income, debts, and reserves decide where you land inside that range.

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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. Self-employed program facts sourced from the PRMG Non-QM Income Qualifying Product Profile, 09/17/2026. Loan limits from FHFA 2026 conforming loan limit values. Virginia tax and property facts from official Virginia state sources linked above.

Find Out What Your Virginia Deposits Qualify You For

Send your statements, 1099s, or P&L. We run every path that fits and show you the loan amount, down payment, and program before you write an offer.