1099 Loans for Independent Contractors & Self-Employed Borrowers

 

Help more self-employed borrowers qualify, without relying on tax returns.

Many successful borrowers earn their income through 1099s but don't fit conventional mortgage guidelines because of business deductions or complex income documentation. Our 1099 Loan Program gives mortgage brokers another solution for clients who may otherwise struggle to qualify.

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By allowing eligible borrowers to qualify using their 1099 income instead of tax returns, you can provide financing options to a wider range of self-employed professionals while delivering a faster, more streamlined mortgage experience.

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Whether your client is purchasing a home, refinancing, or looking to access equity through a cash-out refinance, our flexible underwriting helps you say "yes" to more borrowers.

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Ideal Borrowers for a 1099 Loan

 

Our 1099 Loan Program is designed for self-employed borrowers and independent contractors who receive IRS Form 1099 income instead of traditional W-2 wages.

 

Common borrower profiles include:

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• Real estate agents

• Mortgage loan officers

• Insurance agents

• Financial advisors

• Consultants

• Freelancers

• Independent contractors

• Gig economy workers

• Uber and Lyft drivers

• DoorDash and Instacart drivers

• Sales professionals paid by commission

• Professional service providers

 

If your borrower receives 1099 income and has difficulty qualifying through agency guidelines, this program may provide the financing solution you've been looking for.

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1099 Loan Program Highlights

 

Our flexible guidelines help you qualify more self-employed borrowers with less documentation.

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• Loan amounts up to $4,000,000

• Up to 85% LTV on loans to $2,000,000

• Qualify using 1099 income instead of tax returns

• Expense factors as low as 10% of gross 1099 income

• Cash-out available

• Purchase, rate-and-term refinance, and cash-out refinance available

• Borrowers with less than one year of self-employment may be considered

• Permanent interest rate buydowns available

• Current pay stub or bank statement used to verify ongoing income

• Flexible underwriting for a wide variety of self-employed income scenarios

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Why Mortgage Brokers Choose Our 1099 Loan Program

 

Your borrowers don't always fit inside agency guidelines, but that doesn't mean they aren't qualified.

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Our 1099 Loan Program helps you:

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• Expand your financing options for self-employed borrowers.

• Close loans that may not qualify through conventional lending.

• Eliminate the need for tax returns on eligible transactions.

• Offer a straightforward documentation process for independent contractors.

• Increase your approval opportunities while providing exceptional service to your clients.

 

When other lenders say "no," you can often offer another path to home-ownership or refinancing through 5th Street Capital.

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1099 Loan vs. Bank Statement Loan: Which Is Right for Your Borrower?

 

Both programs are designed for self-employed borrowers, but choosing the right one depends on how your client earns and documents their income.

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A 1099 Loan May Be the Better Fit When:

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• Your borrower receives one or more 1099 forms.

• Their 1099 income accurately reflects their earnings.

• They want to avoid using tax returns.

• They have relatively low business expenses.

• They work as an independent contractor, consultant, commission-based salesperson, or gig worker.

 

A Bank Statement Loan May Be the Better Fit When:

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• Your borrower owns a business.

• Income is primarily reflected through business or personal bank deposits.

• Tax returns don't accurately represent cash flow because of business write-offs.

• Qualifying income is stronger using bank statement deposits than 1099 income.

• The borrower has consistent deposits that demonstrate repayment ability.

 

Because 5th Street Capital offers both programs, you don't have to guess which option is best. Our non-QM specialists will help determine the documentation method that provides the strongest qualifying income for your borrower.

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