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What is a 1099 only loan?
A 1099 only loan is an alternative-documentation mortgage that lets eligible borrowers qualify using income reported on IRS Form 1099 instead of W-2s or full tax returns. It's built for independent contractors and other self-employed borrowers paid on a 1099 basis, such as consultants, real estate agents and gig workers.
Tax returns for 1099 earners often show heavy deductions, which can shrink qualifying income well below what the borrower earns. A 1099 only program starts from gross 1099 income and adjusts it using the method the program allows, rather than starting from the bottom line of Schedule C.
Requirements such as how many years of 1099s are needed, the expense adjustment and supporting documents vary by program and borrower.
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