Quick answer
A 1099 mortgage is a non-QM first mortgage for independent contractors that calculates income from your 1099 forms, typically one or two years, minus a flat expense factor (often around 10%), instead of using the net profit on your tax return. Example: $150,000 in 1099 income with a 10% factor is $135,000 of qualifying income. Pricing is usually above conventional.
What is a 1099 mortgage?
If you are paid as an independent contractor, a conventional lender usually qualifies you on the net profit from Schedule C after all your write-offs. That is often a fraction of what you were actually paid. A 1099 mortgage is a non-QM loan that starts from the gross amount on your 1099s instead.
1099 qualifying income calculator
Example only. Your lender sets the expense factor.
Get a 1099 Mortgage Quote →Example only. Expense factors, how many years of 1099s are used and other terms vary by lender. Not a loan offer; all loans subject to credit approval and underwriting.
How the math works
The lender adds up your 1099 income, usually for the most recent one or two years, and subtracts a flat expense factor to account for business costs. A 10% factor is common, though it varies.
Example: $150,000 in 1099 income − 10% = $135,000 a year, or $11,250 a month in qualifying income. If the same contractor wrote off $70,000 on Schedule C, a conventional lender might only count $80,000.
Some lenders also want a year-to-date earnings statement or recent bank statements showing the 1099 payments are still coming in.
Typical requirements
| Item | What lenders typically look for |
|---|---|
| Income document | 1 or 2 years of 1099 forms |
| Continuity | Same line of work, ideally 2 years; current payments verified |
| Expense factor | Often around 10%; varies by program |
| Down payment / equity | Often 10%–25%, depending on credit and loan size |
| Tax returns | Not used to calculate income |
Typical ranges, not a quote. Terms vary by lender, property type, occupancy and loan size.
Who it fits
- Real estate agents, consultants, contractors, rideshare and delivery drivers, and other 1099 earners.
- Anyone whose write-offs make their tax-return income much lower than their pay.
- Contractors with one or two main payers. If your income comes from many small sources, a bank statement mortgage may fit better.
FAQ
Can I get a mortgage with only 1099s?
Yes, through some non-QM programs. They typically use one or two years of 1099 forms and apply a flat expense factor instead of using your Schedule C net profit.
What expense factor do 1099 loans use?
It varies by lender, but around 10% is common. The factor is subtracted from your gross 1099 income to estimate qualifying income.
Do I need two years of 1099s?
Many programs prefer two years, but some accept one year if you have a history in the same line of work.
Is a 1099 loan the same as a bank statement loan?
No. A 1099 loan uses your 1099 forms; a bank statement loan uses deposits. If you are paid by a few clients on 1099s, the 1099 route is usually simpler.
Part of the self-employed and non-QM mortgage guide: bank statement, P&L, 1099, asset depletion, DSCR, WVOE, ITIN and foreign national loans.
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