A 1099 loan qualifies independent contractors on the gross income shown on their 1099-NEC forms, usually 90 to 100% of it, instead of the net income on their tax returns. You typically need 1 to 2 years of 1099s plus a year-to-date P&L, a 620 or higher credit score, 10 to 15% down, and reserves. No tax returns are required.
Questions on this page
- How do lenders calculate income for 1099 borrowers?
- Can I combine multiple 1099s?
- Can real estate agents get a 1099 loan?
- Can travel nurses or contract clinicians use a 1099 loan?
- Can rideshare and gig workers qualify with 1099s?
- What if my 1099 income dropped this year?
- Do I need a business license for a 1099 loan?
- Can I use 1099 income from a family member's company?
- 1099 loan vs. conventional: when is conventional better?
- Can I switch from W-2 to 1099 and still buy a house?
- Can I get a 1099 loan for an investment property?
How do lenders calculate income for 1099 borrowers?
On a 1099 loan, the lender totals your 1099-NEC income for the last 1 or 2 years, applies a small expense factor (commonly 10%, so 90% of gross is used), and divides by 12 or 24 for monthly income. A year-to-date P&L confirms current earnings. On a conventional loan, by contrast, the lender uses your net Schedule C income after deductions, which is often 30 to 50% lower.
Can I combine multiple 1099s?
Yes. Income from several companies that paid you on 1099s can be added together, as long as the work is ongoing and the history is consistent. Lenders may ask for a letter or evidence that the main payers are still using you.
Can real estate agents get a 1099 loan?
Yes, and realtors are one of the most common 1099 borrowers. Agents usually receive a 1099 from their brokerage, and the 1099 loan uses that gross commission figure instead of net income after marketing, car, and MLS expenses. Lenders look for a 2-year history and may average the 2 years if income varies.
Can travel nurses or contract clinicians use a 1099 loan?
Yes, if paid on 1099s. Travel nurses paid on W-2s with stipends usually go through conventional or VOE programs instead. Gaps between contracts are acceptable when the overall 2-year pattern is steady and you are working at closing.
Can rideshare and gig workers qualify with 1099s?
Yes. Uber, Lyft, DoorDash, and similar earnings reported on 1099-NEC or 1099-K can count when you have a consistent history, usually 2 years. Because gig work has real vehicle costs, some lenders apply a larger expense factor or may suggest a bank statement program instead.
What if my 1099 income dropped this year?
Lenders usually use the lower or most recent figure when income is declining, and they may ask for a written explanation. If the drop was temporary, a 2-year average or a bank statement program might produce more income. If it is ongoing, plan your loan amount on the lower number.
Do I need a business license for a 1099 loan?
Not always. Most 1099 programs verify income with the 1099 forms and confirm ongoing work with a P&L, a letter from the payer, or recent bank statements. A license helps but is not always required, unlike some bank statement programs that verify a business entity.
Can I use 1099 income from a family member's company?
Usually not. Lenders generally exclude 1099 income paid by a relative or by a company you own, because it is not arm's-length income. In that case, a bank statement or P&L program is the better route.
1099 loan vs. conventional: when is conventional better?
Conventional is better when your tax returns already show enough net income, because it prices lower and allows smaller down payments. If deductions cut your taxable income below what you need, a 1099 loan is usually the faster path to approval.
Can I switch from W-2 to 1099 and still buy a house?
Yes, if you stay in the same line of work. Many lenders accept 1 year of 1099 history when you held a W-2 job in the same field before, for example a salaried agent who became an independent broker. A sharp career change usually needs 2 years.
Can I get a 1099 loan for an investment property?
Yes. 1099 programs cover primary homes, second homes, and investment properties, plus condos and 2 to 4 unit properties, with larger down payments on investment purchases. For rentals, a DSCR loan is also worth comparing.
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Related: 1099 loan requirements · 1099 loan FAQ · Bank statement loan · P&L statement loan · VOE-only loan
Terms shown are typical for 2026 and illustrative only, not an offer or commitment to lend. Programs, rates and guidelines vary by lender and change without notice. Save Financial, Inc. is a California-licensed mortgage broker, NMLS #377740, DRE #01875766.