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NMLS#: 2526130 (Company) · 513013 (Adam Styer)
By Adam Styer, NMLS #513013 · Senior Loan Officer, Adam Styer | Mortgage Solutions LP · Austin, TX · Updated 2026-05-17
A 1099-only mortgage lets independent contractors, consultants, real estate agents, and gig workers in Texas qualify for a home loan using 1 or 2 years of 1099 income with a flat expense factor — typically 10–20% — instead of tax returns. I close these loans for clients across Texas with credit scores starting at 660, down payments as low as 10% on stronger files, and access to wholesale Non-QM lenders running both 1-year and 2-year programs.
Who This Loan Is Built For
The 1099 economy is structural now, not a side gig. The U.S. Census reported in July 2025 that 78.4% of all U.S. businesses are nonemployer businesses — sole proprietors, single-member LLCs, and independent contractors. That share grew 2.7% a year through 2023, twice the growth rate of employer firms. In Austin specifically, professional and scientific services is the largest sector at over 133,000 workers, and the post-2024 tech layoff wave moved thousands of W-2 employees into 1099 consulting overnight.
If you're paid on Form 1099-NEC or 1099-MISC and your tax return looks anemic next to your actual cash flow, this is the loan written for you. Common profiles:
- Independent contractors — IT consultants, engineering contractors, project managers paid on 1099-NEC by one or more clients.
- Management consultants — strategy, ops, marketing freelancers running through an LLC or Schedule C.
- Real estate agents — agents on 1099-NEC from a brokerage with predictable splits.
- Insurance & financial sales — independent agents on commission-only 1099.
- Traveling nurses, locum-tenens healthcare — clinicians on contract assignments paid through staffing companies.
- Gig economy professionals — Uber/Lyft drivers with stable history, delivery contractors, courier services.
- 1099 sales reps — manufacturer's reps, technology sales on commission-only structures.
How the Math Works on a 1099-Only Loan
This is the section every other lender skips. It's also the entire reason this program exists.
The Core Formula
Underwriters take your gross 1099 income, multiply by (1 − expense factor), and divide by the number of months in the lookback period.
Worked Example — 1099 Contractor, 2-Year Program
2024 1099-NEC total: $185,000
2025 1099-NEC total: $215,000
Combined 24-month gross: $400,000
Expense factor applied: 10% (typical Non-QM default)
Adjusted gross: $400,000 × 0.90 = $360,000
Qualifying monthly income: $360,000 ÷ 24 = $15,000/mo
That borrower's tax return after Schedule C write-offs might show $90,000 of net income — which is what a conventional underwriter would use. The 1099-only program qualifies the same person on $180,000 annualized. On a 43% DTI, that's the difference between a $400K conforming approval and an $800K+ Non-QM approval.
Expense Factor Ranges by Lender
The expense factor is the single biggest variable in your qualifying income. It varies meaningfully by lender — shopping the program matters.
- Select Non-QM investors: 10% flat expense factor on standard 1099-NEC. This is the friendliest math available.
- Standard Non-QM: 10–20% range depending on industry. A consultant with no overhead lands on the low end; a contractor buying materials lands higher.
- Conservative Non-QM (Newrez SmartSelf): 50% factor on 1099 income. This is closer to bank-statement math and qualifies you for far less. Worth knowing this exists so we can avoid it for the right files.
Multiple 1099 Sources
Lenders aggregate all 1099s in the same line of work. Three steady consulting clients on 1099-NEC = three streams added together. Mixing in a brand-new 1099 from a different industry started in the last 12 months usually gets excluded from the average — same-industry continuity is what matters.
YTD support is standard. Most programs want a year-to-date earnings letter from each payer (or YTD bank statements showing receipts trending consistent with last year). If 2025 was a strong year and YTD 2026 is tracking 30% lower, expect the underwriter to use the YTD number and adjust qualifying income down.
1-Year vs 2-Year Programs
Two-year history is the default and prices best. One-year programs exist at several Non-QM wholesale lenders and they're a real path — not a gimmick — but the trade-offs are real.
| Factor | 1-Year Program | 2-Year Program |
|---|---|---|
| Lookback | Most recent 12 months of 1099 + YTD | Most recent 24 months of 1099 + YTD |
| Max LTV | 75–80% typical | Up to 90% on strong credit |
| Min credit | Often 700+ | 660–680 entry |
| Rate premium | Higher than 2-year | Baseline Non-QM |
| Best for | Recent W-2 to 1099 transition; ramping income | Steady multi-year contractors and agents |
Rule of thumb: if last year's 1099 income is at least 30% higher than the prior year, the 1-year program almost always qualifies you for more loan despite the rate premium. If your income is steady, take the 2-year and the better rate.
1099-Only vs. Bank Statement vs. Conventional
Three legitimate ways to qualify a self-employed Texan. They look similar from the outside; they're not interchangeable.
| Factor | 1099-Only | Bank Statement | Conventional |
|---|---|---|---|
| Income source | 1099-NEC / 1099-MISC gross | 12 or 24 mo of bank deposits | 2-yr tax returns + Schedule C net |
| Expense factor | 10–20% (flat) | 25–70% (varies by industry) | Uses actual Schedule C deductions |
| Tax returns required | No | No | Yes (2 years + transcripts) |
| Best when | 90%+ income on 1099, low cash side work, predictable payers | Mixed income sources, cash deposits, business bank statements show real volume | Schedule C net is high (low write-offs) and you want the cheapest rate |
| Wrong fit when | Heavy Schedule C expenses, lots of cash, or 1099-K from payment processors | Co-mingled accounts with no clear business deposits | Write-offs gut your net income below qualifying threshold |
| Rate vs conventional | Premium over conventional (varies by file) | Premium over conventional (varies by file) | Baseline |
The right product is whichever one qualifies you for the most house at the cleanest rate given your actual paperwork. For most clean-1099 contractors and agents, 1099-only wins. For business owners with material expenses or cash deposits, bank statement wins. For the rare Schedule C filer who doesn't write much off, conventional is cheapest. I run both Non-QM options against conventional on every file before recommending one.
1099-Only Program Terms — Texas 2026
Representative ranges for Texas borrowers. Actual quotes depend on credit, loan amount, expense factor, and which wholesale investor we shop the deal to.
| Detail | Typical Range |
|---|---|
| Rate vs conventional | Premium over conventional; varies by FICO, LTV, and lender |
| Minimum credit score | 660–680 common starting range; lower-credit exceptions may require stronger compensating factors; 720+ often improves pricing |
| Down payment | 10% (strong credit, 2-yr history) to 20–25% standard |
| Maximum LTV | Up to 90% on 2-yr history with strong credit; 75–80% on 1-yr; 80% second home |
| Loan amounts | $150K up to $3M+ (Non-QM jumbo) |
| Reserves | 3–12 months PITI (scales with LTV and loan amount) |
| 1099 history | 2 years standard; 1-year programs available with tighter LTV |
| Property types | Single-family, condo, townhome (primary, second, investment). Some programs exclude rural and multi-unit. |
When 1099-Only Is the Wrong Choice
I'm not interested in selling you a product that isn't the right fit. Three scenarios where 1099-only is the wrong call:
1. Your real expenses are way above 10–20%
If you're a contractor running materials, subs, and equipment costs through your business, your actual expense ratio might be 40–55%. A 1099-only program with a 10% factor will technically qualify you, but if the underwriter pulls your tax return for any reason (some lenders pull anyway, even on a no-doc-style file) and sees the disconnect, the deal can blow up at the closing table. A bank statement or P&L only program prices the file accurately to your real expenses and is more durable in underwriting.
2. Significant income from 1099-K processors (Stripe, PayPal, Venmo)
1099-K reports gross payment processor flow — including refunds, fees, and money that passed through but wasn't yours. Lenders generally apply a higher factor on 1099-K (often 50%) or require reconciliation. If most of your income hits a Stripe or PayPal 1099-K, you'll almost always qualify for more on a bank statement or P&L only program built around your actual deposits.
3. Heavy cash income alongside 1099s
If your 1099s capture 60% of your real income and the other 40% is cash deposits to your bank account, 1099-only ignores the 40%. Bank statement programs capture all the deposits regardless of source. For mixed-income files, bank statement almost always wins.
4. Schedule C net income is actually high
The rare case: you're a 1099 contractor with low overhead and your Schedule C net is 70%+ of your gross. Conventional underwriting using Schedule C net works fine — and conventional rates are lower than Non-QM. Run conventional first if your write-offs are modest.
What I'll Need From You
1099-only loans are documentation-light by Non-QM standards. Plan on:
- Two years of 1099s (1099-NEC and/or 1099-MISC) from every payer. One year if going the 1-year program route.
- YTD earnings letter from each payer or YTD bank statements showing receipts.
- Government-issued photo ID — driver's license or passport.
- Two months of bank statements — most 1099 programs require this for asset verification and sanity check on the 1099 numbers (requirements vary by investor).
- Proof of self-employment for at least two years — business license, DBA filing, brokerage independent-contractor agreement, or CPA letter.
- Proof of funds for down payment and reserves.
- Entity documents — if closing through an LLC or your 1099s are issued to your LLC.
What you won't need: tax returns, W-2s, paystubs, IRS transcripts, or a 4506-T.
Borrowers I See Closing 1099-Only Loans
Independent Tech Consultants
Austin software, cloud, and data contractors paid 1099-NEC by one or more clients. Common path after a 2024 tech layoff converted a W-2 employee into an independent. One-year programs work well for the W-2-to-1099 transition.
Real Estate Agents
Commission income on 1099-NEC from a brokerage. Two-year averaging smooths out market cycles. A strong rebound year qualifies for the 1-year program. More for realtors →
Insurance & Financial Sales
Independent producers on 1099 commission. Aggregating multiple carrier 1099s is standard. Stable renewals make this one of the cleanest underwriting profiles.
Traveling Nurses & Locum-Tenens
Contract clinicians paid through staffing companies on 1099. Multiple consecutive contracts in the same specialty count as continuous same-industry history.
Manufacturer's Reps & Sales Contractors
1099 sales reps with commission-only structures across multiple principals. Same line of work + 2-year history = clean approval.
Healthcare Specialists Moonlighting on 1099
Physicians, CRNAs, and PAs with W-2 day jobs plus contract 1099 income. We can stack the W-2 with 1099-only qualifying for higher loan amounts than either alone.
1099-Only Mortgage FAQ — Texas
A 1099-only mortgage is a Non-QM home loan that qualifies independent contractors, consultants, real estate agents, and gig workers on their gross 1099 income with a flat expense factor (commonly 10–20%) instead of tax returns. The underwriter takes 1 or 2 years of 1099-NEC/MISC forms, applies the factor, and divides by the months to set qualifying monthly income.
Gross 1099 income × (1 − expense factor) ÷ months in the lookback period. A contractor with $180,000 of 1099 income over 12 months and a 10% factor qualifies at $13,500/month. The factor varies by lender and industry. Some lenders are more conservative (Newrez SmartSelf uses 50%), so it pays to shop programs.
Both exist. Two-year programs are the default and price better. One-year programs are available at several Non-QM lenders but usually cap LTV around 75–80% and require a 700+ credit score plus prior same-industry W-2 history. If you switched from W-2 to 1099 in the last 12 months, the one-year path is often your only route.
Bank statement loans review 12–24 months of deposits and apply expense factors of 25–70% depending on the business type. 1099-only loans skip the deposit review and use the 1099 forms directly with a flat 10–20% factor at most lenders. If your income is clean 1099 with low cash side work, 1099-only is simpler and usually qualifies you for more.
Yes. Lenders aggregate 1099s from multiple payers as long as they're in the same line of work. New sources started within the last 12 months are usually excluded from the average. A consultant with three steady clients all paying on 1099-NEC will see all three counted; a side gig that started six months ago typically will not.
Most 1099-only programs start at 660–680. A small number of investors may consider lower scores with larger down payments and stronger compensating factors. 700+ unlocks better pricing and the one-year history option at most lenders. 720+ often creates access to stronger pricing and higher-LTV structures, when available. Below 660 is possible but expect 20–25% down.
1099-K is the messiest 1099 for mortgage purposes. The form reports gross payment processor flow, which can include returns, fees, and pass-through dollars that aren't actual income. Lenders treating 1099-K usually apply a higher expense factor (often 50%+) or require reconciliation to a P&L. If most of your income hits Stripe or PayPal, a bank statement or P&L loan is often a better fit.
Yes. Real estate agents are one of the cleanest fits for 1099-only mortgages. Brokerages issue 1099-NEC, splits are predictable, and your gross commission income is well-documented. Some lenders pull MLS sales history to validate the 1099. Two-year averaging smooths out market cycles; a strong 12-month rebound from a slow prior year is a 1-year program candidate.
No — that's the whole point. 1099-only programs do not pull tax transcripts and do not look at Schedule C. The qualifying income is your 1099 gross with a flat factor applied. If your Schedule C shows $80,000 net on $250,000 gross, conventional uses $80,000 and 1099-only uses $200,000–$225,000. The difference is often the entire loan approval.
Yes. Three cases: (1) most of your income hits a personal bank account from cash or check side work — bank statement is better. (2) Your true expenses are higher than 10–20%, you need a CPA-attested P&L for accurate qualifying — P&L only fits. (3) Your conventional qualifying income would actually be higher because your write-offs are small — use a conventional loan and save the rate premium.
10% down is achievable on two-year 1099 history with 720+ credit on owner-occupied. 15% down is the most common entry point. 20% opens the widest lender pool and the best pricing. One-year programs typically require 20–25% down regardless of credit. Loan amounts above $1 million almost always require 20% or more.
Yes for second homes — LTV caps at 80% typically. For investment property, a DSCR loan that qualifies on the rental income of the property is usually a cleaner fit and prices better than 1099-only on a rental. We model both for your specific deal. Second-home 1099 deals work well for Texas borrowers buying Hill Country or coastal retreats.
Yes for standard programs — US-issued 1099-NEC or 1099-MISC. If you're a US tax resident contracting with foreign clients who don't issue 1099s, you'll need a bank statement program instead, since there's no 1099 to underwrite. For foreign nationals without US tax filings, that's a separate Non-QM product.
Quick Answers About 1099-Only Mortgages
Who is a 1099-only mortgage for?
A 1099-only mortgage can fit independent contractors, commission earners, consultants, real estate agents, physicians, and other self-employed borrowers whose income is documented primarily through 1099 forms.
Is a 1099 loan the same as a bank statement loan?
No. A 1099 loan starts with reported 1099 income, while a bank statement loan starts with eligible deposits. Adam compares both when a borrower has contractor income and meaningful deposit history.
What makes a 1099 file stronger?
Consistent 1099 income, stable industry history, strong credit, reserves, and a reasonable expense assumption usually make the file stronger. Program fit still depends on lender guidelines.
Reviewed by Adam Styer, NMLS #513013. Adam is licensed in Texas through Mortgage Solutions LP, NMLS #2526130. This page is educational and is not a commitment to lend.
Related Complex-Income Pages
1099-only is one path in the broader Non-QM toolkit. Depending on your file, one of these may fit better:
- Bank Statement Loans — for borrowers with mixed deposit sources, business bank statements showing real volume, or co-mingled personal/business accounts.
- P&L Only Mortgage Texas — for sole proprietors and S-corp owners whose CPA can produce a clean profit and loss statement.
- Self-Employed Mortgage Guide — broader overview of how self-employed Texans get approved across all program types.
- Non-QM Loans — the full Non-QM landscape including bank statement, asset depletion, DSCR, and ITIN.
- Mortgages for Business Owners — strategies for LLC and S-corp owners specifically.
Run Your 1099 Numbers
Send me your last one or two years of 1099s and I'll tell you what loan amount you qualify for — usually same day. tax returns may not need to be the primary income document.
Review My 1099 Income Book a 15-Minute Call →Or call (512) 956-6010 — NMLS #513013