1099 Mortgage Loans: Solutions for Self-Employed Borrowers
Get approved for a mortgage without W-2 income. 1099 mortgage loans are designed specifically for self-employed borrowers who need to qualify using their freelance or contractor earnings.
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Benefits
1099 Mortgage Loan Benefits
Qualify with 1099 income:
We can use 90-100% of your gross 1099 income to qualify you for a loan. Traditional lenders only look at net income after business deductions.
Continue making business deductions:
You don’t have to choose between lowering your taxes and qualifying for a mortgage. Your business deductions won’t hurt your loan approval.
Streamlined documentation:
The documentation process is more straightforward for self-employed professionals since you’re not working around conventional lending requirements.
High loan amounts:
You can qualify for loans up to $20 million based on your actual earning capacity, not just what shows up as net income on your tax return.
How it Works
What Is a 1099 Mortgage?
A 1099 mortgage is designed for self-employed individuals who struggle to qualify for traditional mortgages. Most lenders focus on net income after business deductions on your tax returns, which significantly reduces your qualifying amount even if you earn good money.
Instead, 1099 mortgage lenders use your 1099 forms from the past 1-2 years to verify income, often considering a higher percentage of your gross earnings rather than just what’s left after write-offs.
Key Features of a 1099 Mortgage
- Qualify using 1099 income
- Designed for self-employed borrowers
- Loan amounts of up to $20 million
- Flexible qualifying requirements
- Buy a variety of property types
1099 Mortgage Requirements
Credit score:
620 minimum
Down payment:
10% minimum (may be higher based on credit score)
Self-employment history:
2 years in business (or 1 year with prior industry experience)
Reserves:
3-6 months of PITI for loans under $1.5M; 12 months for loans over $3M
Loan amounts:
$100,000 to $20 million
Debt-to-income ratio:
Typically 43% or lower
FAQ
Frequently Asked Questions
Your 1099 mortgage interest rate varies based on several factors, including your:
- Credit score
- Income
- Debt-to-income (DTI) ratio
- Market conditions
- Down payment amount
Similar to a self-employed home equity loan, rates for 1099 mortgages are typically higher than conventional or government-backed loans. This is due to additional risks that 1099 mortgage lenders take on when working with self-employed borrowers.
The minimum down payment starts at 10% for qualified borrowers. The exact amount depends on your credit score and overall financial profile. Borrowers with lower credit scores may need to put down 15-30%.
A 1099 self-employed mortgage makes sense if you:
- Have been self-employed for at least two years
- Receive most of your income through 1099 forms
- Struggle to qualify for conventional mortgages because business deductions reduce your net income.
This program is ideal for:
- Freelancers
- Independent contractors
- Gig workers, consultants
- Business owners who lack W-2 income
If you control when and how you work and receive 1099s instead of traditional paychecks, this loan is designed for you.
Yes. Depending on your documentation and income structure, you might also qualify for bank statement loans, asset-based loans, or P&L loans. Each program uses different documentation to verify your income and financial stability. If you already own a home, you can also explore a self-employed refinance to lower your rate or access equity.
It’s not hard when you work with a lender who specializes in self-employed borrowers. The main challenge is that traditional banks don’t understand how to properly evaluate 1099 income. You’ll need to provide more documentation than W-2 employees — including tax returns, 1099 forms, and profit and loss statements — but the process is straightforward with an experienced lender like Griffin Funding.
Both serve self-employed borrowers but use different documentation. A 1099 mortgage uses your 1099 forms to verify income, while a bank statement loan analyzes 12-24 months of bank deposits. If you receive most of your income through 1099s, this loan type is typically simpler. Bank statement loans work better for cash-heavy businesses or borrowers with income from multiple sources not documented by 1099s.
Yes. You can use a 1099 mortgage to finance investment properties. The qualification requirements remain the same, though investment property loans typically require larger down payments (20-25% minimum) and may have slightly higher interest rates than primary residence loans. You’ll also need larger cash reserves.
Griffin Funding is recognized as one of the best mortgage lenders for 1099 employees because we specialize in self-employed borrowers. Unlike traditional banks that view 1099 income as risky, we understand how self-employment actually works.
- We use your gross income: Most lenders only consider your net income after all business deductions. We can qualify you using 90-100% of your gross 1099 income, dramatically increasing your buying power.
- Experienced with complex income: Whether you’re a gig worker with multiple income streams or a business owner with variable quarterly earnings, we know how to structure your application for approval.
- Streamlined process: We’ve closed thousands of loans for self-employed borrowers and know exactly what documentation underwriters need. No wasted time or surprise requests.
- Competitive rates: We offer competitive 1099 mortgage interest rates based on your specific profile and financial situation.