Who Qualifies for a 1099 Loan

Eligibility requirements for 1099 mortgage programs, including income history, credit, and documentation standards

1099 loans are available to independent contractors and self-employed borrowers whose income is documented primarily through 1099 forms. Eligibility depends on income history, credit, and the ability to demonstrate consistent contracting activity.

Who This Loan Is Designed For

The core requirement is that your income comes from independent contractor work or commission-based employment—not W-2 wages. Common 1099 earners who use these programs:

• Real estate agents and brokers
• Insurance agents
• Mortgage brokers
• Commission-based sales professionals
• IT contractors and consultants
• Healthcare workers (traveling nurses, locum tenens physicians, therapists)
• Creative and media professionals (photographers, designers, writers)
• Rideshare and delivery drivers (with consistent history)

If you receive W-2 income alongside 1099 income, some lenders will let you combine both. The W-2 portion is documented traditionally; the 1099 portion is documented with your forms.

Self-Employment Verification

Receiving a 1099 doesn’t automatically prove self-employment status to a lender’s satisfaction. You’ll also need to document that you operate as an independent contractor:

• Business license or DBA registration
• Professional license (if applicable to your industry)
• CPA letter confirming self-employment status
• Client contracts or letters of engagement

Income History Requirements

Requirement	Typical Standard
1099 history	2 years preferred, 1 year with compensating factors
Consistency	Income should be stable or trending upward
Documentation	All 1099 forms for the qualifying period
Tax returns	Sometimes required for supplemental verification

Some lenders require tax returns in addition to 1099s to verify that the income was reported. Others rely entirely on 1099s and bank statements.

Credit and Financial Requirements

1099 loan requirements are similar to bank statement loans:

Requirement	Typical Range
Credit score	620-700 minimum
Down payment	10-20% minimum
DTI ratio	Up to 50%
Reserves	6-12 months PITIA

Who Does Not Qualify

• W-2 employees with no self-employment income — use a conventional loan
• Borrowers with less than one year of 1099 history — insufficient track record
• Misclassified employees — if your “1099 income” is actually from an employer who should be issuing W-2s, lenders may not accept it
• Irregular or declining income — two years of declining 1099 totals may disqualify or reduce qualifying income significantly

Newly Started Contractors

If you recently started contracting work but have relevant W-2 experience in the same field, some lenders will count the combined history. A software engineer who spent five years as a W-2 employee before going independent may qualify immediately with strong 1099 income.