NON-QM Loans
On a conventional home loan, the lender is restricted to using only the taxable portion of the applicant's salary for qualification purposes.
What is a 1099 Mortgage Loan?
A 1099 Mortgage Loan is designed specifically for self-employed individuals, independent contractors, freelancers, and gig workers who may not have traditional W-2 income documentation. Instead of relying on pay stubs or tax returns, 1099 mortgage programs use bank statements, profit-and-loss statements, or 1099 forms to verify income.
Why consider a 1099 Mortgage Loan?
Traditional mortgage qualification can be difficult for self-employed borrowers, but a 1099 mortgage provides flexibility to those with non-traditional income sources. Key benefits include:
No W-2s or pay stubs required – Qualify using 1099 forms, bank statements, or business financials.
Flexible income verification – Lenders assess average earnings rather than taxable income (which may be reduced by deductions).
Lower debt-to-income (DTI) requirements – Self-employed borrowers often qualify with a higher DTI ratio than conventional loans allow.
Competitive interest rates – While slightly higher than conventional loans, rates remain competitive compared to alternative financing.
Loan amounts up to jumbo limits – Borrowers can qualify for larger loan amounts without W-2s or traditional income proof.
A 1099 mortgage loan is a great solution for self-employed professionals, allowing them to secure home financing without the challenges of traditional income verification.
Key Features of 1099 Mortgages
- Low Down Payment: Less than 10% down payment required.
- Flexible Income Calculation: Tailored to accommodate varying income streams.
- Flexible Credit Score Requirements: Accepts credit scores as low as 620.
- Reserves: The required reserves depend on factors such as credit score, loan-to-value ratio (LTV), and loan amount.
Reserve Requirements:
- For loan amounts up to $1.5MM with a FICO score of 680 or higher: Max 90% LTV with 6 months of PITIA reserves.
- For loan amounts between $1.5MM and $3MM with a FICO score of 660 or higher: Max 75% LTV with 12 months of PITIA reserves.
- For loan amounts between $100,000 and $1.5MM with a FICO score of 700 or higher: Max 85% LTV with 3 months of PITIA reserves.
- For loan amounts between $100,000 and $1.5MM with a FICO score of 660 or higher: Max 80% LTV with 3 months of PITIA reserves.
- For loan amounts between $100,000 and $1.5MM with a FICO score of 620 or higher: Max 75% LTV with 3 months of PITIA reserves.
Additional Benefits
- Gift Funds: Funds from a family member are permissible, provided the borrower contributes at least 5% of the purchase price and reserves from their funds.
- Interested Party Contributions (IPCs): Up to 6% of the purchase price can be covered by credits from sellers, real estate agents, builders, etc. For investment properties, the maximum contribution is 2% of the purchase price.
- Occupancy Options: Eligible for owner-occupied, second/vacation homes, or investment properties.
- Eligible Home Types: Single-family homes, townhomes/villas, 2-4 unit multi-family residences, and condominiums (both warrantable and non-warrantable).
- 1099 Mortgages provide a valuable opportunity for self-employed individuals to secure financing tailored to their unique income situations, making homeownership more accessible without compromising on the quality or terms of the loan.
Your Goals. Your Home. Your Brightside.
Home financing should feel empowering, not overwhelming. At Brightside Mortgage, we’re committed to helping you achieve homeownership with confidence, clarity, and peace of mind. Let’s turn your homeownership dreams into reality—together.
