1099 loans: qualified on the gross, not the write-offs.
One to two years of 1099s set qualifying income with a fixed expense factor, and the Schedule C stays closed.
Your 1099s set the starting number.
A set percentage replaces your itemized write-offs.
We match the file to desks that take 1099s alone.
In short
Key takeaways
- The desk counts gross 1099 totals minus a fixed expense factor, commonly around 10% as of mid-2026. The default haircut on business bank deposits is 50%.
- Bring 1 or 2 years of 1099s plus a year-to-date earnings check. One year can work with prior W-2 history in the same field; see self-employed under 2 years.
- Down payment runs 10 to 20% and credit floors sit near 620 to 660 as of mid-2026. The underwrite is still full ability-to-repay; the only thing that changed is the income paper.
- Owner-occupied non-QM loans carry no prepayment penalty under federal law. If your returns later support conventional qualifying, the exit to an agency refinance stays open, with only the new loan’s ordinary closing costs to pay.
Written and reviewed by the Intel Loans, Inc. lending team · NMLS #2858705Updated July 2026
What this desk looks at
Same work, same pay, different paperwork. This desk reads the 1099 total instead of what survives your deductions.
One year works at some desks, two years widens the field.
The same payers year over year read as stability.
Gross times the factor, divided by twelve, is the income line.
The usual file strength levers still price the deal.
The signature comparison
Three lenses on the same contractor
Run the same contractor, $210,000 of gross and real business expenses, through each documentation lens and the underwriter lands on a different qualifying number every time. Same gross. Different survivor.
Clean forms from a handful of payers point to this page. When a real slice of revenue never gets a form, the bank statement route reads the deposits instead; the last row of the table shows where each lens wins.
| Full doc | 1099 program | Bank statement | |
|---|---|---|---|
| Income document | Federal tax returns with all schedules | IRS Form 1099s plus a year-to-date check | 12 or 24 months of bank statements |
| What the underwriter counts | Net Schedule C income after every write-off | Gross 1099 totals summed across payers | Average eligible deposits after exclusions |
| Expense treatment | Your actual deductions, dollar for dollar against you | Fixed factor, commonly around 10% of gross | Default 50% factor on business accounts |
| History required | 2 years of returns, typically | 1 or 2 years of forms; 1 year with prior W-2 work in the field | 12 or 24 consecutive months of statements |
| When it wins | Light write-offs and steady salaried-style income | Clean forms from a few payers and a ruthless Schedule C | Deposits without forms, or dozens of small payers |
The mechanics
How the desk builds your number
The standard ask is 2 years of 1099s from each payer. A single year works at several desks when it sits on top of W-2 history in the same line of work: the hospital coder who kept the same chair but switched to contract paper is the classic file. The bridge rules live in self-employed under 2 years.
Nearly every desk adds a year-to-date check, because forms only prove last year. A pay ledger from the payer or a bank printout of this year’s deposits usually settles it; apply in October against $160,000 of prior-year forms and the underwriter wants to see roughly $120,000 landed by then.
The factor itself moves by desk and by trade. Around 10% is the common default as of mid-2026, with larger haircuts at some desks for expense-heavy work like owner-operator trucking. A qualifying number the underwriter does not believe becomes a condition list, not an approval, so we match the factor to the trade before the file goes anywhere.
Five 1099s still make one income
Desks total the forms across payers. What they watch is concentration: when one brokerage issued most of the gross and that relationship ended in March, the year-to-date check has to prove the pace survived. Bring every form, even the small ones, because gross the desk cannot see is gross that does not count.
The requirements
1099 loan requirements, desk by desk
No agency writes the rules for 1099 paper. Each desk publishes its own grid, and two desks reading the identical forms can land far enough apart to pay for the shopping. The table below shows where those grids cluster as of mid-2026, typical across the desks we broker to, with the lever that moves each row.
One row deserves underlining: owner-occupied non-QM mortgages carry no prepayment penalty, because federal ability-to-repay rules forbid them on consumer loans. If a lighter-deduction year later opens the agency door, you can refinance out owing nothing for leaving early; the new loan’s ordinary closing costs are the only price of the move. Pressure-test the payment first in the mortgage payment calculator.
| Criterion | Typical range | What moves it |
|---|---|---|
| 1099 history | 2 years of forms from each payer; several desks accept 1 | A single year usually needs prior W-2 work in the same field |
| YTD verification | A pay ledger from the payer or a bank deposit printout | Mid-year files get measured against the prior-year pace |
| Expense factor | Commonly around 10% off gross 1099 totals | Owner-operator trucking and similar high-overhead trades draw a bigger factor |
| W-2 mix | A W-2 job documents normally alongside the 1099 income | The 1099 stream still needs its own 1 to 2 year history |
| Down payment | 10 to 20% of the price on a primary home | Credit score and loan size move it; second homes push it up |
| Credit score | Floors around 620 to 660 as of mid-2026 | 700+ widens the lender pool and trims the down payment |
| Reserves | The new payment, banked for 3 to 6 months | Bigger loans and lower scores push it up |
| DTI cap | Caps land between 43% and 50% at most desks | Standard DTI math; only the income side of the fraction changed |
| Prepayment penalty | Not permitted on a home you occupy | The ability-to-repay framework bars them on non-QM consumer loans, so the exit stays open |
Worked example
The decline and the approval in one St. Petersburg file
Hypothetical example for illustration only, not a quote or an offer. A St. Petersburg realtor carries a $5,900 monthly obligation stack, and one year of commissions produces a DTI near 80% under one documentation lens and near 37% under the other. The lines below run both verdicts back to the paper that produced them.
The obligation stack never moves. Fed the Schedule C, the underwriter divides $5,900 by roughly $7,400 and the file dies at 80%; fed the brokerage’s own IRS forms, the same division lands near 37% and clears every common cap. Pick the documentation before you pick the house, because the wrong paper turns a qualified buyer into a decline letter.
The honest part
What a 1099 loan costs you
Skipping the Schedule C is priced in. Non-QM desks charge for the gross-income read, and conventional down payments start around 3 to 5% against this program’s 10 to 20%. If your write-offs are light enough that the net still carries the payment, full doc is the cheaper path. We run both reads before recommending either, and we will tell you when the boring option wins.
The lender pool is thinner than the bank statement pool. Most non-QM desks quote bank statement files; fewer publish a true 1099 matrix. Less competition on a product costs you spread, which is exactly why this file gets shopped instead of placed at the first desk that says yes. Where the 1099 grid is weak, a bank statement structure on the same borrower sometimes prices better.
Income without a form does not exist here. Cash jobs and any payer who never issued a 1099 drop out of the gross entirely. If a real slice of your revenue lives outside the forms, bank statement loans read the deposits and capture it. The right answer is the program that sees your whole income, and it is not always this one.
How 1099 lending compares
The deduction strategy stops costing you leverage.
Forms you already have, not a bookkeeping project.
Two clean tax years later, conventional reopens.
From forms to closing
Two years of forms, one number in writing.
Send the totals from your 1099s and your credit range. We apply each desk’s factor to the gross and put the competing terms side by side, in writing.
Pull the forms
Last year's 1099s from every payer, or two years where you have them, plus a year-to-date pay ledger or bank printout. Photographs are fine to start.
Sketch the file
Payer names, the gross on each form, your credit range, and the price bracket you are shopping. Nobody pulls credit to price a scenario.
We make the desks compete
Each lender sets its own expense factor and its own one-year rule, and pricing on the identical stack of forms moves even more. Your file goes to the wholesale desks that publish a true 1099 grid, and the spread between their quotes is money you keep.
YTD check, then clear to close
The underwriter ties this year's pace to last year's forms, the appraisal comes in, and the back half of the file is ordinary mortgage work.
Adjacent moves
If this isn’t quite your file
Questions we actually get
Do multiple 1099s from different payers work?
Yes. The desk totals the gross across every form, so a realtor with 1099s from two brokerages or an IT contractor with four client forms qualifies on the sum. What underwriters watch is a payer that vanished: if your biggest form came from a relationship that ended in January, the year-to-date check has to show the pace survived without it. Bring every form, even the $850 one from a two-week engagement, because missing paper reads as hidden income.
Can I mix a W-2 job with 1099 side income?
Yes, and it is a common file. The W-2 job documents the normal way, with paystubs and an employment verification, while the 1099 side needs its own 1 or 2 year form history before a desk will count it. A side contract that started four months ago adds nothing yet. Blended correctly, both streams land in one qualifying number and one DTI.
Can I qualify with only one year of 1099s?
At several desks, yes, when the contract year continues a W-2 career in the same trade. The salaried graphic designer who went freelance in 2025 and kept billing the same kind of work is the file this exception was written for. The grid runs a notch tighter than a two-year file, and the underwriter will verify the earlier job. The full bridge rules are in self-employed under 2 years.
Will the lender still want my tax returns?
Usually the opposite: most 1099 programs are written so tax returns stay out of the file, because a Schedule C on the desk can force the underwriter to the smaller number. What lenders do verify is the forms themselves, often by pulling IRS transcripts with your signed Form 4506-C. If the transcript and your 1099s disagree, the file stops until they match. Keep the forms exactly as issued and let the transcript confirm them.
How does the year-to-date check work mid-year?
Most desks accept whatever shows the money landing: the payer’s own ledger or your deposit history. The measure is pace against last year, and by July roughly half the prior-year gross should already have arrived, about $105,000 against $210,000 of forms. A material shortfall gets questions, and some desks weight the qualifying number toward the slower current run. Tracking ahead of last year cuts the other way and makes the approval memo easy.
Is this a stated income loan?
No. A number a borrower simply declared, with nothing behind it, has been illegal on consumer mortgages since Dodd-Frank. On this program the qualifying figure comes from your payers’ own IRS filings, checked against transcripts, and your credit and full debt load are underwritten like any mortgage. The documentation is different. The underwriting is not.
Qualify on what your payers reported.
Send the gross totals from your forms and your credit range. We come back with the desks that price 1099 paper and the qualifying math in writing.
This is not a commitment to lend or an offer of credit. All loan approvals are subject to credit review, underwriting, and property evaluation. Programs, terms, and conditions are subject to change without notice.
Intel Loans, Inc., NMLS #2858705. Licensed in Florida. Verify our licensing at nmlsconsumeraccess.org. Equal Housing Opportunity.
Worked examples on this page are hypothetical illustrations for education, not quotes or offers. Your figures, including payment amounts and qualifying income, will differ.
Qualifying income on a 1099 program is determined by the lender's underwriting of your actual 1099 forms and year-to-date documentation. Expense factors and other requirements vary by lender and change over time.