1099 Only Loans for Self-Employed Borrowers
1099 Only loans give brokers a simpler way to qualify eligible independent contractors and self-employed borrowers using 1099 income instead of a broader tax-return-based documentation path.
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1099 Only
About program
The 1099 Only Program is built for gig workers, freelancers, and independent contractors who earn income reported on a 1099 form. Instead of traditional tax returns, lenders review one or two years of 1099 forms - plus possibly a year-to-date statement - to assess qualifying income. This helps expedite the process for borrowers who don’t have W-2 income.
Key features
- No tradeline requirement w/ 3 credit scores
- 12/24 month average minus expense ratio
- Non-perm up to 80% LTV
- Unlimited cash-in-hand
- 3 months cash-out seasoning allowed
- Cash-out used for reserves
- Loan amounts up to $4m
- Loan amounts up to $5m for preferred brokers
Required to Disclose
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
IRS Form 1099 documenting income.
Required to Underwrite
(in addition to above)
Credit report
(cannot be older than 60 days) - must be merged into the LOS.
Borrowers' ID
(passport or driver's license).
Purchase contract
(if applicable)
Complete loan application
(including income & employment)
Submission form completed
IRS Form 1099 documenting income.
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FAQ
How many years of self-employment are required to qualify for the 1099 Only mortgage program?
Borrowers must have at least two full years of self-employment or 1099 income to qualify for the 1099 Only loan. This requirement helps mortgage brokers verify income stability for self-employed homebuyers who may not qualify through traditional full-doc underwriting. It’s an ideal solution for commission-based borrowers who cannot provide tax returns or W-2s.
Which types of borrowers benefit most from the 1099 Only loan program?
The 1099 Only loan is designed specifically for self-employed homebuyers, gig workers, independent contractors, freelancers, and borrowers earning 100% commission income. Mortgage brokers use this program to help clients who write off significant expenses or do not show enough income on tax returns.
What income calculation methods are available for borrowers using 1099 income?
Lendz Financial offers flexible income analysis options for 1099 borrowers. Brokers may use a 90% net margin calculation, allowing qualification using up to 90% of gross 1099 earnings, or they may submit a third-party prepared Profit & Loss (P&L) statement, which can more accurately reflect business-related expenses and true cash flow.
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