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1099

INCOME

HOME LOANS

The Home Loan designed for the unique lending needs of 1099 workers and independent contractors.

Are you an independent contractor or employee earning 1099 wages? Have you tried applying for a mortgage with your local bank or credit union and been denied because you didn't show enough on your tax returns?

 

Most traditional home loans, such as Conventional, FHA, VA, Jumbo and USDA loans, do a poor job of serving applicants who earn their income through 1099 wages.  On a traditional home loan, the lender is restricted to using only the taxable portion of the applicant's wages for qualification purposes.  

Being a 1099 wage-earning employee means that you are simultaneously both an employee and a business owner when your file your income taxes.

1099 House Icon unconventionallending 1099 income program derek bissen

Many 1099 wage earners hire a tax advisor to maximize the use of the self-employed rules in the US tax code to minimize their tax burden, which saves them thousands of dollars in taxes. (and who doesn't want to save money?)  Unfortunately since their taxable income is substantially reduced--a traditional lender is restricted to using only the taxable portion of your income for qualification purposes, often resulting in a frustrating process, and in many cases, a loan denial.

 

To put it another way, if the IRS thinks that you're 'broke' on your tax returns, then most lenders will probably see it the same way.

 

THE SOLUTION: THE 1099 INCOME PROGRAM

Using our 1099 Income Program, we see things differently.  Instead of your tax returns, we use your wages from your 1099 as the qualifying income for your new home loan, along with two basic verification steps.  

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DOCUMENT CHECKLIST

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👉  KEY PROGRAM HIGHLIGHTS:

 

  • Ideal for any worker who receives 1099 wages, who does not qualify for a traditional mortgage because they do not "show enough income" on their Federal income tax returns

  • No Tax Returns needed to qualify.

  • Qualify on the average of 1-2 years of 1099, verified with year-to-date bank statements showing consistent employer deposits.

  • Applicants must be working for the same company for a minimum of 24 months or longer.

  • Additional Loan Features »

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🚀  WHO IS THE IDEAL CANDIDATE  FOR THE 1099 INCOME PROGRAM?

 

  • Workers whose employer pays consistently using 1099 wages,
  • Independent contractors
  • Sole proprietors (no formal business entity)
  • Freelancers working for the same client(s) on a consistent basis.
  • NOTE:  The employer must cover all normal day-to-day business expenses. (regardless of how you file your Federal income taxes)
  • If the employer DOES NOT pay the employee's expenses (such as a truck driver having to pay for their own fuel, repairs, etc.), then this program will not work for your type of employment; however you may be a great candidate for our BANK STATEMENT PROGRAM »

 

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💸 IF YOUR EMPLOYER DOES NOT COVER YOUR NORMAL BUSINESS EXPENSES, THEN CHECK OUT OUR BANK STATEMENT PROGRAM »

⚙️ HOW DOES A 1099 INCOME PROGRAM WORK?

You must be working at the same business for at least 2 years or longer. We can calculate the income based on either a 2 year 1099 average, or simply on the most recent year's 1099.  

First, let's look at the 2 year approach:

  1. Provide your 1099's for the most current 2 years for the same employer. We divide the total figure by 24 months.

  2. Your employer provides a letter confirming your date of hire, and that you have no mandatory job-related expenses.

  3. YTD Bank Statements (for the bank account where you deposit your payroll)

If everything checks out in steps 2 and 3, then we'll use the income in step 1 as the income for your new home loan.

 

Next, let's look at it again, using the 1 year 1099 approach:

Simply go back to step one,  and divide the income on your most recent 1099 by 12 months.

If steps 2 and three check out, then this becomes the income figure for your new home loan.

🔎 At a Glance
We are committed to transparency.  Here is more information about the program. If you have additional questions, we are delighted to assist!
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Minimum Down Payment

 

10% - for loan sizes ranging from $125,000 - $3MM

FICO of 740+

Reserves:

6 months up to $1MM loan size
9 months up to $2MM loan size
12 months up to $3MM loan size

 

15% - for loan sizes ranging from $125,000 - $3MM

FICO of 700+

Reserves:

3 months up to $1MM loan size
6 months up to $2MM loan size
9 months up to $3MM loan size)

 

PMI (Private Mortgage Insurance)

None

 

Minimum mid-credit score

575
(LTV will vary, see loan originator for details)

 

Min/ Max Loan Amount

$150,000 - $3MM

 

Loan Repayment Terms

30 years

 

Amortization

30 Year Fixed Rate / 5/1 ARM /  7/1 ARM

Prepayment Penalties

None for Owner-Occupied Homes or Second Homes.

Investment properties Only -  6 months interest on 80% of the original principal balance

 

Recent Housing Events

Min 24 months - OR-1 day minimum (See Loan Originator for details)

 

Max Seller Contributions

6% for Owner-Occupied or Second Homes

2% for Investment Homes

 

Escrows

Escrows for Property Taxes and Home Insurance required

 

Occupancy

Primary Residence / Second/Vacation Home / Investment

 

Acceptable Property Types

Single Family, Townhome/ Villa/ Condominium/ Condotel or Non-Warrantable Condominium

 

UNACCEPTABLE Property Types

Manufactured Homes, Modular Homes, Mobile Homes, Raw Land, Condotels, Log Homes, Dome Homes, Tiny Homes, Commercial Mixed-Use

 

Other

Yes! We accept income from legal Cannabis-based businesses. 🌿

If you are a contractor or employee earning 1099 wages, we'd love the opportunity to answer all of your questions and review your options and see if this is the right loan program for you.

 

Remember, stop letting these banks tell you NO, when we have more reasons to say YES.

HAVE A QUESTION?

GET PRE-APPROVED FOR THIS PROGRAM TODAY »

CALL TODAY:
(813) 928-9610

Green Telephone Icon

HAVE A QUESTION? MESSAGE US TODAY  »

This is not a commitment to lend.  Not all borrowers will qualify for the loan programs listed.  All program terms and conditions are subject to change and may be discontinued without prior notice.  Contact loan originator for program questions and scenarios.