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Derek Bissen, May 15 2021

1099 Income Program – Everything you Need to Know

Working as a contractor, consultant, or salesperson often means you get paid on a 1099 basis, versus a regular salary.  You may not mind it, especially since you can write off many of your common expenses and decrease your tax liability, but getting a mortgage may be difficult.

When you try to get a home loan, many lenders will turn you away because your tax returns show much less income than what you make. They won’t consider your actual income and will deny your loan because on paper and according to the IRS, you don’t make enough.

But what if you do?  That’s where our 1099 Income Program helps – it’s a saving grace for the thousands of Florida residents who’ve taken a 1099 income position but want to get a mortgage.

What is a 1099 Income Program?

Our 1099 Income Program gives contractors like yourself a chance at securing mortgage financing. Unlike traditional loan programs, we don’t look at your adjusted gross income on your tax returns – we already know it will be lower than what you make.

Instead, we use your actual 1099's plus the paystubs from your employer. We’ll consider the expenses you have and deduct them from your 1099 income, but this still leaves you with much more useable income than a standard traditional loan program.

In other words, we give 1099 contractors a chance to secure home financing – financing we know they can afford, but on paper, it may not look that way.

In other words, we give 1099 contractors a chance to secure home financing – financing we know they can afford, but on paper, it may not look that way.

If you work for someone yet receive 1099 income, you may qualify. Contractors,  and consultants are all eligible for the 1099 Income Program. Rather than treating you like you’re self-employed, we treat you like an employee with wages that may qualify you for a loan.

Here’s what you need to qualify:

Now let’s get into the important details – how you qualify.

Credit Score Requirements

As with any loan program, the higher your credit score, the better your chances of approval. With the 1099 Income Program, your credit score can be as low as 620.  

Credit scores may affect down payment as follows:

Reserve Requirements

All borrowers regardless of their credit score, need 3 months of reserves on hand. Reserves are money you have available (liquid assets) after you pay your down payment and closing costs. It’s like an emergency account, letting us know you can cover at least 3 months of mortgage payments if something happens.

To qualify, you’ll need 3 months of principal, interest, real estate taxes, homeowner’s insurance, and HOA dues in a liquid account such as checking, savings, CDs, or liquid investments.

Property Type

Our 1099 Income Program works on all properties including owner-occupied, second homes, and investment homes. Like most loan programs, we can lend for single-family homes, townhomes, villas, condos, and multi-family units.

Down Payment Requirements

We discussed the minimum down payment requirements for the 1099 Income Program above, but you may accept gift funds too.

At a minimum, you must contribute 5% of the down payment, but can accept gift funds for the rest. Before you do, talk to us about the source and how you’re receiving the funds. We must document the funds properly to use them. We need to ensure the funds didn’t originate from a loan somewhere down the road that would affect your debt-to-income ratio later.

Why Choose the 1099 Income Program?

If you’re a contractor, salesperson, or consultant, you deserve mortgage financing just as much as someone with a salaried (W-2) position. If you can prove you can afford the loan and your income is steady, you deserve the same loan treatment.

The 1099 Income Program makes it a lot easier to secure a mortgage despite working as a 1099 employee. With no prepayment penalties on owner-occupied homes or second homes and the allowance of up to 6% of the purchase price for closing costs from interested parties, we make it easy to secure financing to buy a home as a 1099 employee.

No one pays PMI, even with less than 20% down, and the guidelines are much more relaxed than a traditional loan.

WRAPPING UP...

If you’re a 1099 employee tired of being turned down for traditional financing, let’s chat.

We work with borrowers in all industries, making it easy to qualify for the home loan you deserve. We understand the frustration that comes with getting turned down for a loan when you know you can afford it.

We treat our borrowers like people, not numbers. We talk to you about your situation and fit you into the program that will benefit you not only today but long-term too. We have worked with hundreds of 1099 employees throughout the Tampa Bay area and are happy to help you too.

Simply give us a call so we run some numbers for you and answer all your questions!  You can also drop us a line HERE »

Yours in successful homeownership,




Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director


Written by

Derek Bissen

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