How to Get a Mortgage Loan with a 1099
Jul 01, 2023 By Susan Kelly

Are you a freelancer or self-employed individual trying to purchase a home but need to have w-2 forms for traditional lenders? Don't worry - getting a mortgage loan with your 1099 income is possible.

Even if you need the standard employment credentials most banks require, numerous programs can assist you in obtaining a home loan despite your non-traditional income.

This blog post will provide an overview of what types of mortgages best suit those with 1099 income and show you how to get started securing them. Read on as we explore how to make your homeownership dreams a reality!

What is a Non-Qualified Mortgage

A non-qualified mortgage (or Non-QM) is a loan specifically designed for borrowers who either don't fit within traditional lending guidelines or cannot prove income through standard documentation.

Non-QM loans often feature higher interest rates and fees than those associated with qualified mortgages but can still provide a viable option for those who may not otherwise be able to secure financing.

Who Should Get a 1099 Loan

A 1099 loan is best suited for self-employed or freelancers who need W2s to verify their income. This type of loan, also known as a non-conforming or portfolio mortgage, requires that you show proof of your income but allows you to provide other forms of documentation such as bank statements, tax returns, and even asset verification.

Conventional Mortgages for 1099 Earners

The most traditional type of mortgage loan is the conventional loan, which is backed by either Fannie Mae or Freddie Mac. It's a great option for 1099 earners because you can receive up to 97% of the home's value as a loan. Your debt-to-income ratio must be below 43% to be eligible.

FHA Loans

The Federal Housing Administration (FHA) offers a loan program backed by the government. It's a great option for 1099 earners because if your credit score is 580 or higher, you can receive up to 96.5% of the home's value as a loan. You also don't need any down payment; your debt-to-income ratio can be up to 50%.

VA Loans

The Veteran's Affairs (VA) loan program is another mortgage option for 1099 earners. VA loans are available to service members, veterans, and eligible surviving spouses. To qualify, you must meet income requirements and have a credit score of 620 or higher. You don't need any down payment, and your debt-to-income ratio can be up to 50%.

How to Qualify for a 1099 Mortgage Loan

Owning a home is a dream for many people, but it can be hard to qualify for traditional mortgage loans if your income comes from self-employment or 1099 income. The good news is that there are ways to get approved, even if you still need to get the standard employment credentials most banks require.

If you have a 1099 income and want to get a mortgage loan, here are some steps you can take:

Build Your Credit Score

The higher your credit score is, the more likely you'll be approved for a loan. If it's not high enough, consider boosting it over time. This credit score includes paying down debt and making all credit card payments on time.

Increase Your Down Payment

Most mortgage lenders require a down payment of at least 20%, but you can increase your chances of approval by putting down more. The amount you'll need to pay depends on the type of loan and lender, so be sure to research beforehand.

Provide Documentation

Be prepared to provide proof of income for two years before applying for the loan. This proof of income includes tax returns, bank statements, 1099s, and other forms that can demonstrate your ability to repay the loan in full.

Find an Experienced Lender

Not all lenders are familiar with or willing to work with 1099-income borrowers, so it pays off to shop around. Ask around for referrals or look for a lender specializing in this loan program.

Get a Co-Signer

If you cannot qualify independently, another option is to ask a family member or friend with good credit and income history to co-sign the loan application. This co-signing of the loan application can help increase your chances of approval and secure better loan terms.

By following these steps, you can put yourself in the best position possible when applying for a mortgage loan using 1099 income. A reputable lender can help guide you through the process and get you into the home of your dreams!

Required Documentation

When applying for a mortgage loan, 1099 income earners must provide certain documents to prove their income. These documents include copies of your 1099 forms, tax returns from the prior two years, and an explanation of any large deposits or withdrawals in your bank statement.

Additionally, you may need to show additional evidence of income, such as pay stubs or letters from clients verifying the amount you were paid for completed projects.

Lenders may also require proof that you have a steady stream of work. To do this, they may ask for several contracts with your clients detailing services provided and the payments received.

They might also want to see your business plan describing how you plan to make money in the future. If you are an independent contractor, a lender may request copies of invoices sent to clients and proof that you have been actively working.

It is important to note that the documentation and eligibility requirements vary from one mortgage program to another, so it is wise to check with your lender before applying for a loan.

Additionally, lenders may have additional requirements if they deem it necessary. For example, some lenders require extra documentation if self-employed individuals declare large business expenses or tax deductions.

Gathering all the documents the lender requires beforehand ensures that your loan process will be smooth and successful. Having these documents ready when you apply will help put you ahead of the game in getting approved for a mortgage loan with your 1099 income.

No matter what, don't let the paperwork overwhelm you — it is possible to get a mortgage loan with your 1099 income! By being prepared and understanding which documents are necessary for the application process, you can get one step closer to achieving your goal of homeownership.


Can you get a mortgage loan with 1099?

Yes, you can. Many lenders recognize self-employment income and offer loans tailored to meet the needs of those with 1099 income. To get a loan, provide all your required employment documentation, like bank statements or tax returns, to verify your income.

How many years of 1099 do you need for a mortgage?

The number of years required can vary from lender to lender. Generally, you'll need at least two years of consistent 1099 income to qualify for a mortgage loan. However, some lenders may require more depending on your unique situation.

Can you get an FHA loan with 1099?

Yes, the FHA has a program that allows 1099 earners to qualify for loans. To get an FHA loan with 1099 income, you'll need at least two years of consistent 1099 earnings and other necessary documentation, such as bank statements and tax returns.


Getting a mortgage loan with 1099 is challenging, but it is possible. Securing such a loan requires seeking specialized lenders and having the right financial elements. You'll also need to bracket any unique challenges that prevent you from otherwise qualifying. Staying organized and preparing your documentation ahead of time will go a long way toward speeding up the process and successfully securing a loan with your 1099 income.