If your income comes from 1099s, you can qualify for a mortgage using up to 90% of your gross 1099 earnings — with no tax returns required.
Most lenders offering 1099 mortgage loans use 90% of your gross 1099 income as the qualifying figure. Some lenders go to 100%. None of them use your after-deduction taxable income from your Schedule C. This single difference — gross 1099 income vs. net taxable income — is often the difference between approval and denial for independent contractors, real estate agents, consultants, and commission earners in California.
Call (800) 239-1103 — we will tell you in 15 minutes exactly what you qualify for using your 1099 income.
What Is a 1099 Mortgage Loan?
A 1099 loan is a non-QM (non-qualified mortgage) product that uses your Form 1099 earnings as income documentation instead of W-2s or tax returns. The lender collects your 1099s from the last one or two years, calculates your average gross income, applies the income factor (typically 90%), and uses that number to determine how much you qualify for.
The critical advantage: your business write-offs do not reduce your qualifying income. A real estate agent who earned $200,000 in gross commissions but deducted $80,000 in business expenses qualifies on $180,000 (90% of $200,000) with a 1099 loan — not the $120,000 that would appear on their Schedule C after deductions.
How 1099 Income Is Calculated
Here is the exact math most lenders use:
- Collect all 1099 forms from the past 12 or 24 months
- Total your gross 1099 earnings for the period
- Apply the income factor — typically 90% of gross 1099 income (some lenders use 100%)
- Divide by the number of months to get monthly qualifying income
- Use that figure in a standard debt-to-income calculation
Example: $220,000 in 1099 income over 2 years
- Average annual gross: $110,000
- At 90%: $99,000 qualifying income per year = $8,250 per month
- At 43% DTI: supports a monthly payment of approximately $3,547
- Estimated mortgage amount: approximately $465,000 at current rates
Compare that to what a conventional lender would do: take your Schedule C net after deductions — often $55,000–$70,000 on that same $110,000 gross — and qualify you on that. The difference in buying power is enormous.
Who Uses 1099 Loans?
- Real estate agents and brokers — commission income, heavy deductions
- Mortgage loan officers — same structure, same problem
- Independent contractors — IT, engineering, creative, legal
- Consultants — management, HR, finance, marketing
- Healthcare professionals — traveling nurses, locum tenens physicians
- Freelancers — designers, writers, developers
- Gig workers — platform income at significant scale
- Tech contractors — W-2 to 1099 transitions common in Silicon Valley and Bay Area
1099 Loan Requirements
- 1099 forms: 1 or 2 years depending on the lender
- Income factor: 90% of gross 1099 earnings (some lenders use 100%)
- Self-employment history: At least 12 months in the same line of work (many lenders prefer 2 years)
- Credit score: Minimum 620 FICO (700+ for best rates and LTV)
- Down payment: 10% minimum on primary residence, 20-25% for investment property
- DTI: Up to 50% with strong compensating factors
- Loan amounts: Up to $3 million with select lenders
1099 Loan vs. Bank Statement Loan
| Feature | 1099 Loan | Bank Statement Loan |
|---|---|---|
| Income docs | 1099 forms (1-2 years) | Bank statements (12-24 months) |
| Income calculation | 90% of gross 1099 earnings | Average deposits x expense factor |
| Write-offs affect income? | No | No |
| Tax returns needed? | No | No |
| Best for | Commission/contract income on 1099 | Business owners with deposit history |
| Min down payment | 10% | 10% |
| CPA required? | No | No |
Frequently Asked Questions
Why do lenders use 90% of 1099 income instead of 100%?
The 10% haircut accounts for the reality that 1099 earners typically have some business expenses even if they are not fully deducted on their tax returns. It is a conservative underwriting assumption — and still dramatically more favorable than using your net taxable income from Schedule C. Some lenders, particularly for borrowers with strong credit and larger down payments, will qualify on 100% of gross 1099 income.
Can I use a 1099 loan if I also have some W-2 income?
Yes. If you have a mix of W-2 and 1099 income, lenders can often combine both. The W-2 portion qualifies under standard guidelines while the 1099 portion uses the 90% gross income calculation.
What if my 1099 income varies year to year?
Lenders average the two years. If year two is significantly higher, some lenders allow just the most recent 12 months. If income is declining, a bank statement loan averaging deposits may produce a stronger qualifying figure.
Do I need to be self-employed to use a 1099 loan?
Not necessarily. Some 1099 earners work through staffing agencies and are technically not self-employed. What matters is that your income is documented on 1099 forms. We will assess your specific situation and find the right fit.
Can I get a jumbo 1099 loan in California?
Yes. Non-QM lenders regularly fund 1099 loans above $2 million in California. Bay Area tech contractors, real estate agents, and consultants frequently use this program for high-value home purchases in Marin, San Francisco, the Peninsula, and Silicon Valley.
Call (800) 239-1103 or apply online to get pre-approved using your 1099 income today. We typically deliver a pre-approval letter within 24-48 hours of receiving your documents.
Related: Self-employed mortgage hub | Bank statement loans | P&L only loans | Asset depletion loans
DiVita Home Finance, Inc. | NMLS #323700 | Equal Housing Lender | Licensed in California
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
