What is a 1099 loan and how does it work?

A 1099 loan is a Non-QM mortgage that qualifies borrowers using 1 or 2 years of 1099 income forms instead of full tax returns. We apply a fixed 10% expense factor to your gross 1099 earnings to determine qualifying income — meaning 90% of what you were paid on your 1099s counts, regardless of what your Schedule C or tax return shows. It's designed specifically for independent contractors, freelancers, gig workers, and commission earners whose tax write-offs would otherwise make qualifying income appear too low.

Do i need to file a full tax return for a 1099 loan?

No. The 1099 program does not require your full tax return as the income documentation. We use your actual 1099 forms and year-to-date documentation to calculate qualifying income. This means your Schedule C deductions — home office, mileage, equipment, health insurance, etc. — don't reduce your qualifying income the way they do on a conventional loan.

Can i use just 1 year of 1099 income?

Yes. Both 1-year and 2-year 1099 income are accepted. With 1 year, we use that single year's gross earnings as the annual qualifying income. With 2 years, we average the two years together. Either way, you'll need current year-to-date documentation to confirm your income is continuing at a consistent pace.

What types of 1099 incomes are supported?

The program accepts 1099-NEC (non-employee compensation — the most common for contractors and freelancers), 1099-MISC (miscellaneous income), and 1099-K (payment card and third-party network transactions, common for gig platform and marketplace sellers). Income from multiple payers can be combined. As long as the income is documented on 1099 forms and supported by YTD documentation, it's eligible.

What's the difference between the 1099 loan and the bank statement loan?

Both are Non-QM programs that avoid full tax return income calculation — but they work differently. The 1099 loan uses your actual 1099 forms and applies a 10% expense factor. The bank statement loan uses 12 or 24 months of bank deposits and applies an expense factor based on your account type (typically 50% for business accounts or a CPA letter). Which produces higher qualifying income depends on how you're paid and how you manage your accounts. If you receive both 1099s and deposit through a business account, we'll run the numbers both ways and show you the better path.

1099 Loans — For Contractors, Freelancers & Gig Workers

You Get Paid in 1099s. You Should Be Able to Get a Mortgage With Them.

The problem with conventional loans for independent workers isn't your income — it's how they calculate it. Your tax return deductions slash your qualifying income down to almost nothing. The 1099 loan skips the tax return entirely and qualifies you on what you actually earned.

1 or 2 Years of 1099s Accepted
No Full Tax Return Required
Loans Up to $4,000,000
LTV Up to 90%
Low 10% Expense Factor

See What My 1099s Qualify For Call Now

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How Your Income Is Calculated

The 10% Expense Factor — and Why It Matters

Here's the problem with conventional loans for 1099 workers: they use your tax return, which means every business deduction you claimed reduces your qualifying income. Wrote off your home office, mileage, equipment, and health insurance? Your taxable income on paper might be $60,000 even if you deposited $160,000.

The 1099 program bypasses that entirely. We look at your gross 1099 earnings and apply a fixed 10% expense factor — one of the lowest in the Non-QM market. That means 90% of what you earned counts as qualifying income, regardless of what your Schedule C shows.

Alternatively, if you have a third-party P&L statement prepared by a CPA or tax professional, that can substitute for the fixed expense factor — useful if your actual expenses are even lower than 10%.

Example: 2 Years of 1099 Income

Year 1 Gross 1099 Income$180,000

Year 2 Gross 1099 Income$196,000

2-Year Average Gross$188,000/yr

Expense Factor Applied− 10% ($18,800)

What Tax Returns Would Show*≈ $72,000/yr

Qualifying Monthly Income (1099 Program)$14,100/mo

*Illustrative only. Actual tax return income varies by deductions claimed. This example assumes typical contractor write-offs of ~62%. The 1099 program uses $169,200/yr ($14,100/mo) — significantly higher than the tax return approach.

The Process

How a 1099 Loan Works

The documentation is simpler than a conventional loan because we're not asking for your full tax return. Here's how it goes from inquiry to closed.

Step 1

Gather Your 1099s

Collect your 1099 forms from the past 1 or 2 years — 1099-NEC, 1099-MISC, 1099-K, or any other type that reflects your earnings. No W-2s, no full Schedule C, no full tax return filing needed.

Step 2

We Calculate Your Qualifying Income

We total your gross 1099 earnings, average over the period used (1 or 2 years), and apply the 10% expense factor. The result — 90% of your gross annual 1099 income — is your qualifying income.

Step 3

Confirm YTD Income

We'll need year-to-date documentation — typically recent invoices, bank deposits, or a YTD earnings statement — to confirm your income is continuing at a consistent level through the current year.

Step 4

Pre-Approval in 24 Hours

No AUS system to wait on. Manual underwriting means a real person reviews your scenario. Most 1099 borrowers hear back within one business day with a clear answer on qualification.

Step 5

Close and Move In

Standard closing process — title, escrow, appraisal, signing. The Non-QM structure is invisible at the closing table. You close like any other homebuyer.

Step 1

Gather Your 1099s

Collect your 1099 forms from the past 1 or 2 years — 1099-NEC, 1099-MISC, 1099-K, or any other type that reflects your earnings. No W-2s, no full Schedule C, no full tax return filing needed.

Step 2

We Calculate Your Qualifying Income

We total your gross 1099 earnings, average over the period used (1 or 2 years), and apply the 10% expense factor. The result — 90% of your gross annual 1099 income — is your qualifying income.

Step 3

Confirm YTD Income

Step 4

Pre-Approval in 24 Hours

No AUS system to wait on. Manual underwriting means a real person reviews your scenario. Most 1099 borrowers hear back within one business day with a clear answer on qualification.

Step 5

Close and Move In

Standard closing process — title, escrow, appraisal, signing. The Non-QM structure is invisible at the closing table. You close like any other homebuyer.

Know Before You Apply

What This Program Handles — and What It Doesn't

The 1099 program is flexible, but it has specific requirements. Here's the honest picture before you apply.

What Qualifies

1099-NEC, 1099-MISC, and 1099-K income
1 or 2 years of 1099 forms
YTD earnings documentation
Multiple 1099 payers combined
3rd-party P&L as alternative to fixed expense factor
Loan amounts up to $4,000,000
LTV up to 90% purchase
Primary, second home & investment property
Credit scores from 660

What Doesn't Qualify

You earn primarily through a business account and prefer deposit-based qualification — Bank Statement loans may calculate more income
You receive both W-2 and 1099 income — we can combine them or evaluate each path separately to find the best qualifying scenario
You have less than 12 months of 1099 history — some programs require at least a 12-month track record
Your credit score is below 660 — other Non-QM programs start at 620
You own rental properties and want income-free qualification — DSCR loans qualify on the property's rent, not your income at all

On YTD documentation: On YTD documentation: The program requires current year-to-date documentation to confirm your 1099 income is ongoing. This can be recent invoices, a client statement, a YTD earnings summary, or bank deposits that show continued income at a level consistent with prior 1099s. We're not looking for perfection — just confirmation that you're still earning at the same general level.

On the P&L alternative: If a third-party P&L prepared by a CPA, EA, or licensed tax professional shows that your actual business expenses are lower than 10%, that P&L can substitute for the fixed expense factor — potentially increasing your qualifying income beyond what the 10% factor produces. Ask your loan officer which approach gives you the better number.

Who This Is For

If You Get a 1099, This Program Was Built for You

Independent income takes many forms. Here's who benefits most from the 1099 loan.

Trade & Service Contractors
Electricians, plumbers, HVAC techs, builders — high earners who write off tools, vehicles, and materials. Your tax return lies. Your 1099s tell the truth.
Freelancers & Creatives
Designers, developers, writers, photographers, videographers — you invoice clients and collect 1099s. Your actual earnings are strong; your tax return just doesn't show it.
Real Estate Agents
You earn entirely on commission, get 1099s from your brokerage, and spend heavily on marketing and client development. The 1099 loan credits 90% of what you earned, not what you kept after deductions.
Gig & Platform Workers
Rideshare drivers, delivery contractors, marketplace sellers receiving 1099-K — your platform income is documented and verifiable. We can work with it.
Commission-Only Sales Professionals
100% commission income reported on 1099s — in finance, insurance, software, medical sales, or any field where you're paid on results, not salary.
Independent Professionals
Attorneys, consultants, accountants, therapists, and other licensed professionals who operate independently and receive 1099s from multiple clients.

The FlexPoint Difference

Why 1099 Earners Choose FlexPoint

Non-QM income calculation takes judgment and experience. Here's what we bring to it.

$4M

Max Loan

Among the highest limits available for 1099 income borrowers.

90%

Max LTV

As little as 10% down on purchases — even with non-traditional income.

10%

Expense Factor

One of the lowest in the Non-QM market — 90% of your gross 1099 income counts.

Since 1996

In Business

Nearly 30 years helping borrowers with non-traditional income qualify for mortgages.

$5B+

Loans Funded

Over $5 billion closed. We know how to get independent earners across the finish line.

Free Consultation · No Credit Pull

See What Your 1099s Qualify For

Tell us about your 1099 income and what you're trying to accomplish. We'll calculate your qualifying income and get back to you within 24 hours — no credit pull, no pressure.

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Estimated Loan Amount$300,000

$50,000$3,500,000+

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NMLS #243082
Multi-State Licensed

By submitting this form, you consent to be contacted by FlexPoint Inc. regarding your inquiry. This is not a commitment to lend. All loans subject to credit approval. Restrictions apply. Some products may not be available in all states. FlexPoint Inc. NMLS #243082.

FAQ

Frequently Asked Questions About 1099 Loans

The questions independent workers and contractors ask us most.

Your 1099s Prove What You Earn. Let's Use Them.

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