1099 Income Loans: Mortgages for Independent Contractors

If you're paid on a 1099 — an independent contractor, gig worker, freelancer, or commissioned salesperson — you know the frustration: you earn well, but your write-offs shrink the income a traditional lender will count. A 1099 income loan fixes that by qualifying you on your 1099 income directly, without full tax-return underwriting. As a broker licensed in Texas and Florida, here's how this non-QM program works.

What a 1099 income loan is

A 1099 loan is a non-QM (non-qualified mortgage) that qualifies you using your 1099 forms — often just one or two years of them — instead of a full stack of personal and business tax returns. Some programs apply a modest expense ratio to your 1099 income; many count a high percentage of it, since 1099s already document money paid to you. The result is a qualifying income that reflects what you actually earn.

Who 1099 loans are built for

• Independent contractors across every trade and profession
• Gig workers (rideshare, delivery, platform work) with steady 1099 income
• Freelancers and consultants paid per project
• Commission-based salespeople (real estate agents, account executives)
• 1099 healthcare and travel professionals

If your income arrives on a 1099 and your tax returns undersell it, this is your program.

How qualifying works

1. Provide your 1099s — usually the most recent one to two years.
2. The lender establishes your income from those 1099s, sometimes applying an expense ratio.
3. Standard checks apply — a credit score, a down payment (often around 10–20%), and reserves.
4. No full tax-return analysis and a simpler path than reconstructing a self-employed return.

Compared with a bank statement loan, a 1099 loan is often simpler when your income is cleanly documented on 1099s rather than flowing through business accounts.

1099 loan vs bank statement loan

Both are non-QM options for self-employed and independent earners, but they read different documents:

• 1099 loan — qualifies on your 1099 forms. Cleaner if most of your income is reported on 1099s.
• Bank statement loan — qualifies on deposits. Better if your income flows through business accounts and isn't fully captured on 1099s. → What is a bank statement loan

We compare both and use whichever qualifies you for more.

The Texas and Florida angle

Texas and Florida are magnets for contractors, agents, and gig professionals — and no state income tax means more of your 1099 income stays with you. Property taxes (higher in Texas) and insurance (higher across much of Florida) affect your monthly payment, so we factor them into what you can comfortably carry.

Julia Kovalskiy is a residential mortgage loan originator (NMLS #2661068) licensed in Texas and Florida. This article is educational and is not a commitment to lend; programs, terms, and eligibility vary by lender and individual circumstances.