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.
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 you tell the IRS that you're 'broke' on your tax returns, then your lender will see the same thing and think that you lack the ability to make the monthly payments for your new mortgage.
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.
Minimum Down Payment
(Credit score may affect down payment. See below)
Minimum Down Payment to avoid PMI
PMI (Private Mortgage Insurance)
N/A (Does not apply to this program)
Minimum mid-credit score
Min/ Max Loan Amount
$100,000 - $3MM
Loan Repayment Terms
* for primary residences and second homes. Investment homes may have an optional prepayment penalty. Consult your loan originator.
At a Glance
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.
Reserves *: The amount of reserves depends on the credit score, LTV and the loan amount (Primary Residence Purchases).
* Consult loan originator for loan amounts > $1MM
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.