1099 Only loans: your 1099 is the income doc.
If your income arrives on Form 1099, contractor, real-estate agent, financial advisor, gig worker, you don't need to wade through tax returns to qualify. Your most-recent 1099 plus 60 days of statements does the job.
Quick answer: what is a 1099 Only loan?
- Income source: most-recent 1099(s) + 60 days of bank statements as a sanity check.
- Tax returns required? No.
- Who it's for: independent contractors, commissioned salespeople, gig workers, real-estate agents, anyone whose income arrives on Form 1099.
- Min FICO: typically 660+.
- Down payment: typically 15–25%.
- History: usually 2 years of 1099 income.
How underwriting calculates 1099 income
The underwriter takes the gross 1099 amount and applies an expense haircut to get qualifying income, same logic as business bank statements, since 1099 revenue typically has expenses behind it.
- Default expense factor: typically 50% (1099 gross × 50% = qualifying income).
- Lower expense factor can be used with a CPA letter documenting actual overhead, common for low-overhead 1099 work like real-estate agents, financial advisors, and pure-service contractors.
- The 60 days of bank statements should show deposits roughly consistent with the 1099 revenue.
Worked example
Real-estate agent, prior-year 1099 = $240,000. Business overhead minimal (license, MLS, marketing). CPA attests true expense ratio is 20%.
- Default 50% factor → $120,000/yr → $10,000/mo qualifying income.
- 20% factor with CPA letter → $192,000/yr → $16,000/mo qualifying income.
1099 Only vs. Bank Statement — when to pick which
If your income is primarily 1099 from a small number of payers, 1099 Only is usually cleaner, one document instead of 24 statements. If you receive a mix of 1099 and direct-payment work, bank statements may capture more of the picture.
What you'll need
- Most-recent 1099(s): most programs accept the prior tax year's 1099s.
- 60 days of business or personal bank statements showing recent deposits.
- Optional CPA letter for a lower expense factor.
- 2 years of self-employment / 1099 history.
- Standard mortgage docs.
FAQ
I just switched from W-2 to 1099 last year. Will 1099 Only work?
If you have less than 2 years of 1099 history, you're likely better off with 12-month bank statements or, if you have liquid assets, an asset-based program.
My 1099s are inconsistent year to year. Does that matter?
Investors typically use the most-recent year. If the most-recent year is meaningfully lower than the year before, underwriting may average, we'll model both.
Do I need to itemize my expenses?
Not for the loan. The expense factor is applied programmatically, a CPA letter can lower it, but you don't need to schedule expenses out.
Can I use 1099 income from multiple payers?
Yes. Underwriter sums the 1099 totals across all payers.
My 1099 has YTD gross only, no prior year. What now?
If you have less than 12 months of 1099 income, talk to us about bank statement programs or asset-based qualification instead.
Ready to see if this is the right program?
Start the application or book a 20-minute call. We'll model real numbers, not estimates.