1099 Only Mortgage Loans for Self-Employed Borrowers
1099 Only loans give mortgage brokers a simpler way to qualify eligible independent contractors, freelancers, and other self-employed borrowers using 1099 income instead of a broader tax-return-based documentation path. This 1099 mortgage loan program streamlines income analysis and helps move qualified files through the lending process more efficiently.
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1099 Only
About program
A 1099 mortgage loan is often a practical solution when a borrower's documented 1099 income provides a clearer qualification path than tax returns. Instead of relying on traditional tax returns, this program uses eligible 1099 income, making it a strong home loan for independent contractors, freelancers, gig workers, and commission-based professionals.
Program Highlights
Qualification & Documentation
This program is designed for self-employed borrowers whose documented 1099 income provides the primary basis for qualification.
- One or two years of 1099 income
- 12- or 24-month income averaging
- 90% gross income analysis option
- Third-party-prepared Profit & Loss option
- Minimum 620 FICO
Loan Structure & Flexibility
The program offers flexible financing solutions while accommodating a variety of purchase, refinance, and cash-out scenarios.
- Up to 90% LTV
- Non-permanent residents eligible up to 80% LTV
- Unlimited cash-in-hand
- Three-month cash-out seasoning
- Cash-out may be used for reserves
- Loan amounts up to $4 million
- Loan amounts up to $5 million for preferred brokers
Property & Loan Parameters
These guidelines identify the property types and loan parameters supported by the program.
- Primary residences, second homes, and investment properties
- Single-family homes, condos, condotels, studios, and 2–4 unit properties
- Property eligibility varies by program series
- Additional occupancy and property guidelines may apply
Required to Disclose
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
IRS Form 1099 documenting income.
Required to Underwrite
(in addition to above)
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
IRS Form 1099 documenting income.
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FAQ
How many years of self-employment are required to qualify for the 1099 Only mortgage program?
Borrowers must have one or two years of self-employment or 1099 income to qualify for the 1099 Only loan. This requirement helps mortgage brokers verify income stability for self-employed homebuyers who may not qualify through traditional full-doc underwriting. It’s an ideal solution for commission-based borrowers who cannot provide tax returns or W-2s.
Which types of borrowers benefit most from the 1099 Only loan program?
The 1099 Only loan is designed specifically for self-employed homebuyers, gig workers, independent contractors, freelancers, and borrowers earning 100% commission income. Mortgage brokers use this program to help clients who write off significant expenses or do not show enough income on tax returns.
What income calculation methods are available for borrowers using 1099 income?
Lendz Financial offers flexible income analysis options for 1099 borrowers. Brokers may use a 90% net margin calculation, allowing qualification using up to 90% of gross 1099 earnings, or they may submit a third-party prepared Profit & Loss (P&L) statement, which can more accurately reflect business-related expenses and true cash flow.
What helps a 1099 Only loan move through underwriting more efficiently?
Submitting complete documentation upfront—including current IRS Form 1099s, a completed loan application, borrower identification, and any supporting income documentation—can help reduce additional requests during underwriting and keep the review process moving quickly. Brokers should also identify declining income, major year-over-year changes, or changes in the borrower’s line of work before submission.
When should a broker use 1099 Only instead of Profit & Loss Only or Standard Doc?
A 1099 Only loan is often the better choice when documented 1099 income provides the clearest qualification path with an alternative to tax-return-based income analysis. If a borrower's business financials or traditional income documentation provide a stronger income story, a Profit & Loss Only or Standard Doc loan may be a better fit.
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