The 1099 Income Program - a Mortgage Program Designed for Independent Contractors and 1099 Wage-Earners

Are you an independent contract or wage earner making 1099 Income? Have you been in business or working for the same employer for at least two years? And have you been denied for a mortgage simply because you “didn’t show enough income” on your tax returns? 

It just isn't fair. You work hard—and you deserve to buy a home just like everyone else.

Unfortunately, many banks routinely deny home loans to perfectly well-qualified applicants, just because of your tax returns. For many self-employed borrowers and independent contractors, using tax returns to qualify for a mortgage eliminates most banks and mortgage lenders from your list of mortgage options. 

If you’re tired of this, and looking for a solution, look no further.

 When you're an independent contractor, you need mortgage loans designed for your type of income. One such mortgage program is called a 1099 Income Program, which is also known as a 1099 Mortgage, 1099 Income Loan, or a 1099 Home Loan.

THE 1099 INCOME PROGRAM IS IDEAL FOR INDEPENDENT CONTRACTORS AND INDIVIDUALS WHO EARN 1099 WAGES, who have been working for the same employer for the most recent 24 months or longer, and who may be having difficulty qualifying for a traditional mortgage loan because there isn’t enough taxable income found on your tax returns.

This program is idea for:

• 1099 Workers/Employees who file their taxes using a sophisticated tax strategy to legally reduce your tax burden.
• 1099 Workers/Employees who have been working for the same employer for at least 24 months or longer.
• 1099 Workers/Employees who earn commission and bonus income.  

WHAT IS THE 1099 INCOME PROGRAM?

THE 1099 INCOME PROGRAM is a mortgage loan that works much like any other Conventional mortgage or FHA loan you may have encountered, EXCEPT one key difference: the income calculation approach that the lender uses for qualification. For instance, with a traditional mortgage, the lender uses the income shown on your tax returns; but on a 1099 income program, the lender counts up to 100% of the income on your 1099's as the income for qualification.

HOW DOES THE 1099 INCOME PROGRAM WORK?

Here’s the basic breakdown of how a lender counts the income for this program:

• 1.   First, you’ll provide the lender with your 1099’s for the most recent two years. This will serve as the income documentation.
• 2.   They will add them together and divide by 24 months. This will provide a monthly GROSS INCOME figure.
• 3.   Next you’ll provide the lender with your bank statements where your payroll is deposited, dating back to the beginning of the current calendar year. They will be looking to make sure that your income is consistent with the previous year.
• 4.   And finally, your employer will provide a letter stating that you have no job-related expenses. 

...AND THE RESULT IS THE MONTHLY UINCOME THE THE LENDERS USES FOR QUALIFICATION PURPOSES. 

Yes, it’s that simple---and this approach gives the lender a much better idea of your true employment income vs the tax return approach found with a traditional home loan.       

There are:

• NO INCOME TAX RETURNS REQUIRED
• NO complex forms
• NO income limits to qualify

The only IRS form you need to need to complete is a 4506-C transcript request to show that you filed your 1099's with the IRS. *(the lender does NOT request transcripts for your entire income tax returns---the lender ONLY requests the transcripts of the 1099's themselves)

FEATURES AND BENEFITS OF THE 1099 INCOME PROGRAM

• 30 Year Fixed Rate Terms
• NO PMI– Regardless of your down payment
• Occupancy – You can use this loan to buy a Primary Res / Second/Vacation Homes/ or Investment Homes·     Eligible Property types: Single Family Homes, Townhomes/Villas, 2-4 Unit Multi-Family Homes, Condominiums, and non-warrantable condos
• No Prepayment Penalties: there are no prepayment penalties as long as you are using this loan to finance a primary residence or second home. You can either to keep the loan for as long as you own the home, or refinance the loan into a traditional home loan program when you’re ready. The choice is yours.
• Loan Amounts - Minimum $100,000 -  Maximum $3.5MM 

HOW TO QUALIFY FOR THE 1099 INCOME PROGRAM

• You must be working for the same employer for at least 24 months or longer
• You’ll need a down payment of at least 10% of the purchase price
• You’ll need to provide your most recent two years of 1099’s as well as bank statements where your payroll is deposited, for the current calendar year.
• You’ll need a to provide the most recent 2 months for all your other personal accounts, including checking, savings, money market, IRA, 401(k), stock accounts, etc.
• Minimum Credit Scores: as low as 575 (down payment may be affected by score)
• Letter from your employer – verifying that you have NO job-related expenses.
• Loan Application – you'll need to complete a standard Uniform Residential Loan Application. Our online application can be found HERE. 

STAY CURRENT!  Loan Programs can change over time.  To get the most current up-to-date information on the 1099 Income Program, check out our 1099 INCOME PROGRAM PAGE or DROP US A LINE HERE.  

If you’re a successful 1099 wage earner or independent contractor, it didn’t happen because you took “NO” as answer---so stop letting these big banks and credit unions tell you NO, when we have more reasons to say YES. 

Yours in successful homeownership,

Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director

​About the Author: 

Derek Bissen is a licensed Mortgage Loan Originator with over 25 years of experience in the industry. Derek is a self-employed lending expert who is known for his ability to work with borrowers who have substantial wealth and non-traditional lending needs. He is a creative loan structurer and specializes in portfolio lending, asset-based lending, bank statement lending, as well as traditional loans such as Conventional, FHA, VA, and first-time homebuyers.

Derek's expertise in the mortgage industry is unparalleled. He is a trusted advisor to his clients, providing them with customized loan solutions that meet their unique financial goals and needs. His vast experience and knowledge make him a valuable asset to anyone looking to purchase a home or refinance their existing mortgage.

As a highly-experienced loan originator and author, Derek is committed to sharing his knowledge with others. He regularly provides valuable insights and advice to readers looking to navigate the complex world of mortgage lending. His articles are informative, engaging, and backed by years of hands-on experience.

With his wealth of knowledge and dedication to his clients, he is the go-to source for all your mortgage lending needs. If you're looking for a reliable and trustworthy mortgage expert, contact Derek today to learn more about how he can help you achieve your financial goals.