1099 Mortgage Loans: Solutions for Self-Employed Borrowers

What Is Form 1099?

Form 1099 is a tax document you receive if you earn income outside of regular employment, such as freelance and gig work or contract jobs. The form reports your non-employee earnings to the IRS. You’ll use this form when filing your taxes to ensure you’re accurately reporting all of your income.

Can you get a mortgage with 1099 income?

Yes, it’s possible to get a mortgage with 1099 income with the right type of financing. Lenders recognize that many self-employed individuals, gig workers, or freelancers may not have traditional pay stubs but still have stable income.

Around 15 million people in the U.S. are self-employed, making up about 10% of the workforce. This population includes not just business owners and freelancers, but also content creators for social media. As of 2024, there are about 27 million paid content creators in the US alone, many of whom work full-time as social media influencers.

1099 mortgage loans cater to this large self-employed population. Additionally, self-employed borrowers can explore options like an asset-based loan, which lets you use your assets like savings or investments to qualify.

If you’re worried about getting a mortgage with no job, these alternative financing options can make homeownership more accessible.

What Is a 1099 Mortgage Loan and How Does It Work?

A 1099 mortgage loan is designed for self-employed individuals or independent contractors who don’t have traditional W-2 income. It works like a bank statement loan, but uses your 1099 income from the past 1-2 years as proof of income instead of bank statements.

After you provide your 1099 forms to your lender, they will assess your financial stability based on this rather than typical employment records. This makes it easier for non-traditional workers to qualify for the 1099 mortgage loan. Just like with any mortgage, you’ll need to keep an eye on 1099 mortgage interest rates to ensure you’re getting the best deal.

What Are the Requirements for a 1099 Mortgage Loan?

To qualify for a 1099 mortgage, you need to meet specific requirements that ensure you’re financially stable despite having non-traditional income.

• Self-employed or business owner status: You must be self-employed or a business owner for at least two years. If you’ve worked in the same field, one year may be acceptable.
• Down payment: At least 10% down is required to qualify for a 1099 mortgage loan, although a higher down payment may be required depending on your credit score. Note that a higher down payment can lead to a better mortgage interest rate on a 1099 loan.
• PITI reserves: You’ll need three to six months of principal, interest, taxes, and insurance (PITI) in reserves for loans under $1.5 million, or 12 months for loans over $3 million.
• Credit score: A score of 620 or higher is necessary in order to get a 1099 mortgage.
• Loan amounts: Minimum loan is $100,000 and maximum can be up to $20 million.

These qualifications make getting a mortgage as a gig worker or freelancer achievable with the right preparation.

Who Should Get a 1099 Mortgage?

A 1099 mortgage is a great option if you don’t have traditional W-2 income and work independently. You should consider this loan if you’re:

• An independent contractor
• A freelancer
• A gig worker, like a driver or delivery worker
• A consultant
• A business owner with irregular income
• A sole proprietor
• A social media influencer

How to Get a 1099 Mortgage Loan

Follow these steps to get a 1099 mortgage loan:

1. Determine if you’re considered self-employed

To qualify as self-employed for a mortgage, you typically need at least two years of consistent 1099 income from freelance work, independent contracting, or business ownership. Lenders will review your tax returns, business financials, and possibly bank statements to assess income stability.

If you’ve been self-employed for less than two years but have a strong work history in the same field, you may still qualify. A mortgage professional can help determine your eligibility.

2. Prepare your 1099 and other documents

Since you don’t have W-2s, lenders will want to see other documents to verify your income and financial stability. You’ll likely need:

• 1099 forms from the last two years
• Two years of personal and business tax returns (including all schedules)
• Profit and loss statements to show how your business is doing
• Bank statements (both personal and business) to prove cash flow
• A list of debts and assets so lenders can calculate your debt-to-income (DTI) ratio

Lenders use these documents to determine whether you have enough reliable income to cover a mortgage.

3. Consider your self-employed income

Self-employed borrowers often face challenges because lenders base loan eligibility on net income: the amount left after business deductions. While writing off expenses lowers your tax bill, it can also reduce the income lenders see, potentially limiting how much you can borrow.

To qualify, lenders typically average your net income over the past two years, though options like bank statement loans can help if deductions significantly reduce your reported income. A credit score of 620 or higher, a debt-to-income ratio under 43%, and a larger down payment can all improve your chances of approval.

4. Complete an application 

Once you have your documentation in order, find a reputable 1099 mortgage lender and fill out a loan application.

At Griffin Funding, we have experience working with borrowers from all kinds of backgrounds, including business owners, investors, freelancers, and other self-employed individuals. Reach out today and we can help you prepare to apply and walk you through the application and lending process.

Partner With a Leading 1099 Mortgage Lender

If you’re a freelancer, contractor, or gig worker, a 1099 mortgage can help you achieve homeownership. These loans give you the flexibility to qualify based on your unique financial situation by using your 1099 income instead of traditional pay stubs.

Griffin Funding, one of the best mortgage lenders for 1099 employees, understands the needs of all self-employed individuals and offers tailored solutions to help you secure the loan you need. Download the Griffin Gold app to prepare for your journey. This all-in-one tool is designed to give you a clear picture of your finances and guide you through the mortgage process.

Take control of your financial future today and make your homeownership dreams a reality by partnering with a leading 1099 mortgage lender like Griffin Funding.