What is a 1099 HELOC?

A 1099 HELOC is a home equity line of credit where the lender qualifies you on the income shown on your 1099 forms instead of your tax returns. It is built for independent contractors whose write-offs make their taxable income look low.

Can I get a HELOC with 1099 income?

Yes. Several wholesale lenders offer HELOCs that qualify contractors on 12 or 24 months of 1099s, commonly counting 90% to 100% of the gross after a small expense factor.

Do I need tax returns for a 1099 HELOC?

Not for the income calculation. The lender uses your 1099s, and some pull an IRS wage-and-income transcript to confirm them.

How many years of 1099s do I need for a HELOC?

Most lenders want about two years in the same line of work. Some accept a shorter 1099 history if you did the same work as a W-2 employee before.

What if my 1099 income went down this year?

Most lenders use the lower year or ask for a short explanation. A one-time dip with a clear reason is usually workable.

How much can I borrow with a 1099 HELOC?

Usually up to 80% to 85% combined loan-to-value on a primary home, with lines commonly from $50,000 to $1,000,000.

What credit score do I need for a 1099 HELOC?

Programs start around 640, and around 700 or higher opens the best terms.

Is a 1099 HELOC better than a bank statement HELOC?

It depends on how you are paid. If most of your income arrives on 1099s, the 1099 method is simple. If you are paid in cash, by many small clients or through your own company, bank statements often show more income.

Home Equity · 7 min read

1099 HELOC: A Home Equity Line of Credit for Independent Contractors

By Mike Basti, President and Mortgage Broker · NMLS #322904·November 12, 2026

A 1099 HELOC lets independent contractors qualify for a home equity line of credit on the gross income shown on their 1099 forms, not the smaller net figure left on their tax returns after write-offs. It is built for real estate agents, consultants, contract nurses, loan officers and anyone else paid on a 1099.

Key takeaways

Lenders use 12 to 24 months of 1099s and commonly count 90% to 100% of the gross, after a small expense factor.
No personal or business tax returns are required for the income calculation.
Expect a credit score from about 640, up to about 80% to 85% CLTV on a primary home and lines from $50,000 to $1,000,000.
About two years in the same line of work is typical; some lenders accept less if you did the same work on a W-2 before.

Contractors get turned down for HELOCs for a frustrating reason. Your 1099s might show $240,000 a year, but after mileage, a home office, marketing and everything else your CPA writes off, the tax return shows a fraction of that. A bank qualifies you on the fraction. A 1099 HELOC qualifies you on the 1099s.

How a 1099 HELOC figures your income

The lender totals your 1099-NEC or 1099-MISC income for the last 12 or 24 months and applies a small expense factor, so it commonly counts 90% to 100% of the gross. If this year's 1099s are well below last year's, most lenders use the lower figure or ask for an explanation. Several 1099s from different payers are fine, and many lenders let you add W-2 pay from a separate job.

The line itself is set by your equity: usually up to 80% to 85% of your home's value, minus what you owe on your first mortgage.

A worked example

Example: a real estate agent in Irvine earned $240,000 on 1099s in each of the last two years. After write-offs, the tax return showed $95,000. A 1099 program at 90% counts $216,000, or $18,000 a month. The home is worth $1,100,000 with a $500,000 first mortgage. At 80% CLTV, total debt can be $880,000, which leaves room for a line of up to $380,000.

This is an illustration, not a quote. Each lender sets its own expense factor and limits, and I compare them for your file.

Who a 1099 HELOC fits

Real estate agents, loan officers and other commissioned professionals.
Consultants, designers, developers and freelancers paid by clients on 1099s.
Travel and contract nurses, therapists and other contract clinicians.
Truck drivers and rideshare or delivery drivers with a steady 1099 history.

Of the 2,000+ self-employed loans we have closed since 2009, about 5% qualified on 1099s; most business owners use bank statements instead. If your income comes in cash, from many small clients or through your own company, a bank statement HELOC often counts more. If you have no tax returns to show at all, see the no tax return HELOC.

Typical terms (November 2026)

Credit: from about 640; around 700 or higher opens the best terms.
Combined loan-to-value: up to about 80% to 85% on a primary home; lower on rentals and second homes.
Line size: commonly $50,000 to $1,000,000.
History: about two years in the same line of work.
Cost: priced above a full-documentation HELOC, plus origination and closing costs. Rates have been unusually volatile and change daily; call for today's quote.

1099 HELOC vs. 1099 home equity loan

The same 1099 income method works for a fixed-rate home equity loan (a HELOAN). A HELOC is a revolving line with interest-only payments during the draw period, good for projects paid in stages or as a cash cushion. A home equity loan pays one lump sum at a fixed rate, better if you know the amount and want a set payment. My guide to no-doc home equity loans covers the fixed-rate side.

Documents to have ready

Every 1099 for the last one or two years, including small ones. A missing 1099 is the most common reason a file comes up short.
A year-to-date summary of your 1099 income, or a short P&L if the lender asks for one.
Recent bank statements showing the deposits.
Your mortgage statement, homeowners insurance and photo ID.

Some lenders also pull an IRS wage-and-income transcript to confirm the 1099s match what was reported. As an independent mortgage broker, I send one application to the lenders with 1099 home equity programs and show you the offers side by side. For purchases and refinances, see 1099 income loans.

“For self-employed borrowers, the bank is often the wrong first stop. Business owners write off expenses, which is smart for taxes, but it lowers the income a bank is allowed to count, and many banks simply don't offer self-employed programs. When someone comes to us after a bank said no, I tell them not to give up. We look at what actually comes into their account, through bank statement, P&L and other programs most banks don't have, and very often we find a loan that fits.”
— Mike Basti, Founder & President, Save Financial (NMLS #377740)

Sources (accessed November 12, 2026): IRS: About Form 1099-NEC; IRS: Get your tax records and transcripts; CFPB: What is a HELOC?; CFPB: What is a debt-to-income ratio?. Program terms are typical as of November 2026 and vary by lender; we confirm them for your file.

About this article: Save Financial is a California-licensed independent mortgage brokerage (NMLS #377740, DRE #01875766) in business since 2009, with offices in Newport Beach and Marina del Rey, serving all 58 counties. This article is general education, not a loan offer or commitment to lend. For a real quote, apply online or call 949-379-5320.