1099 Mortgage Loans (Self-Employed Mortgages)

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. Some of the best mortgage lenders for 1099 employees specialize in helping borrowers with non-traditional income.

Additionally, you might 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?

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.

1099 Mortgage Qualification Requirements

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

• 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

Securing a mortgage may seem more complicated for self-employed individuals than it is for traditional W-2 employees. However, with the right preparation and understanding of lender requirements, getting a 1099 mortgage loan is entirely possible. 

1. Determine if you’re considered self-employed

Lenders classify borrowers as self-employed if they receive 1099 income instead of a W-2, typically working as independent contractors, freelancers, or business owners. To qualify as self-employed for mortgage purposes, you generally need to demonstrate at least two years of consistent 1099 income. Lenders assess stability and earning patterns by reviewing your tax returns, business financials, and sometimes bank statements.

If your self-employment history length is less than two years, some lenders may still approve you if you have a solid work history in the same industry before becoming self-employed. Consulting a mortgage professional can help you 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. Staying organized and making sure your tax returns accurately reflect your earnings can help you avoid any complications during the approval process.

3. Consider your self-employed income

One of the biggest hurdles for self-employed borrowers is that lenders look at your net income—meaning the amount left after tax deductions. While writing off business expenses helps lower your tax bill, it can also make it seem like you earn less than you actually do.

Lenders usually average your net income from tax returns over the past two years to determine how much you qualify for. If you’ve taken a lot of deductions, you might need to explore options like bank statement loans, which use bank deposits instead of tax returns to verify income.

A credit score of typically 620 or higher and a low debt-to-income ratio (under 43%) can also improve your chances of approval. Some lenders may require a larger down payment (often 10-20%) to offset the risk of fluctuating self-employed income.

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.