1099-only mortgages in Arizona — qualify without tax returns
Independent contractors, gig drivers, and high-1099 earners get punished by tax returns that aggressively expense. 1099-only programs use your gross 1099 income (not Schedule C net) to qualify.
How the program calculates qualifying income
Lender averages your 1099 income over 12 or 24 months and applies an expense factor. For service work with minimal overhead (consulting, sales, gig driving): roughly 90-95% of 1099 gross counts. For higher-overhead work (delivery requiring vehicle, contracting with materials): 80-85%.
Example: $180,000 in 1099-NEC over the trailing 12 months, 90% expense factor = $162,000 qualifying / 12 = $13,500/month. Much higher than what Schedule C net would show after typical contractor deductions.
Who fits — common Arizona buyer profiles
- Real estate agents earning $90K+ in commissions, expensing heavily.
- Rideshare/delivery drivers with $50K-$80K gross income.
- Independent consultants billing $150K+ as 1099.
- Locum tenens physicians moving between hospital contracts.
- Independent insurance agents.
- Construction subcontractors paid 1099.
Documentation list
- 12 or 24 months of 1099-NEC or 1099-MISC forms.
- Most recent 2 months of business and personal bank statements.
- CPA or tax preparer letter confirming income type (sometimes required).
- Credit report 680+ (some programs 700+).
- Two-year work history in the same field.
Common questions
Can I mix W-2 and 1099 income on this program?
Yes — most programs accept blended income. W-2 portion uses standard documentation, 1099 portion uses the 1099-only calculation.
What if I just got a new 1099 contract?
Need 12 months of 1099 history minimum on most programs. Shorter histories require larger reserves or co-borrower.
Does this work for a 2nd home or investment property?
Owner-occupied primary works. Some lenders allow second home with overlay. Investment property uses DSCR instead.
Are 1099 expenses subtracted from qualifying income?
Not directly — that's the point of the program. Tax-return-based programs subtract business expenses; 1099-only programs apply a fixed expense factor.
How Mike + Cornerstone help
I write 1099-only programs for Phoenix-metro real estate agents, locum doctors, and independent consultants constantly. The qualifying income lift over a tax-return-based program is often $40K-$80K annually — enough to push buyers from a $300K home to a $475K home. We model both paths and pick the one with the highest qualifying income for your scenario.
Talk to Mike first Get pre-approved
No pressure, no commitment. Free 20-minute consult. Mike will look at your scenario and tell you straight whether this works for you.