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 the IRS thinks that you're 'broke' on your tax returns, then most lenders will probably see the same thing and that's rarely a good thing when you're trying to obtain a loan.
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.
At a Glance
NEW APPROVAL GUIDELINES
Minimum Down Payment
10% - for loan sizes ranging from $125,000 - $3MM
FICO of 740+
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+
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)
Minimum mid-credit score
Min/ Max Loan Amount
$150,000 - $3MM
Loan Repayment Terms
30 Year Fixed Rate / 5/1 ARM / 7/1 ARM
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 for Property Taxes and Home Insurance required
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
We accept 1099 Independent contractors for 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.
Minimum Mid-credit score and Down Payments (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.