Texas mortgage options · Adam Styer
1099-Only Mortgages in Texas — Qualify Without Tax Returns
A 1099-only mortgage qualifies Texas contractors on gross 1099 income minus a flat 10% expense factor, not Schedule C net. Minimum credit starts at 660, and 720-plus credit buys with 10% down.
1099-only mortgages at a glance
- Qualifies on
- Gross 1099 income minus 10%
- 1099 history
- 1 or 2 years
- Minimum credit
- 660
- Down payment
- 10% with 720+ credit
- Loan size
- Up to $3M to $4M
- Second homes
- Up to 80% loan-to-value
Figures reflect programs Adam currently places. Your terms depend on the full file.
By Adam Styer, NMLS #513013 · Senior Loan Officer, Adam Styer | HyperSmart Home Loans · Austin, TX · Updated 2026-09-18
A 1099-only mortgage qualifies you on gross 1099 income with a 10% expense factor instead of your Schedule C net. The 10% is standard across every program I place; two of them waive it entirely when the paying company confirms in writing that you carry no job-related expenses, and one allows a lower documented ratio with a CPA certification. Programs use one or two years of 1099s, but the one-year option still requires a two-year history with the same payer or in the same industry, and year-to-date pay records or two to three months of bank deposits have to show at least 90% of the prior year’s pace. You cannot own the company that issues the 1099; a 1099 paid to your business instead of to you personally needs an expense letter from your tax preparer. Minimum credit is 660, loan-to-value reaches 90% on a primary-residence purchase with 720-plus credit, and loan amounts run to $3 million to $4 million by program.
What actually moves the file
The expense factor is almost never the lever on a 1099 file; it is 10% nearly everywhere. The lever is the payer. A 1099-NEC issued to you personally from a company you don’t own is the clean case. A 1099 issued to your LLC needs a preparer letter and, at some investors, proof you own 100% of that LLC. A 1099-K from a payment processor reports gross flow including refunds and fees, and gets either a 50% factor or a reconciliation to a P&L, at which point a bank-statement or P&L program usually qualifies you for more.
The second lever is the year-to-date test: if the current year is running below 90% of last year, the lower figure is the qualifying income, and a strong prior year does not rescue it. The refinance in Which deposits count as income? turned on exactly this: a large payment reported on the borrower’s 1099 was excluded as a one-time bonus until the payer and compensation history were documented. A 1099 is evidence of income; it is not, by itself, proof the income continues.
These are Non-QM loans — they sit outside the Qualified Mortgage safe harbor — but that does not mean no rules. The CFPB's Ability-to-Repay rule (12 CFR §1026.43) still requires the lender to make a reasonable, good-faith determination that you can repay, using verified income or assets. On a 1099-only file, your 1099 forms, the expense factor, and your reserves are that documentation. It is not a no-doc loan. It is a different doc set.
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.
Austin's 1099 Economy — Why It Matters Here
Austin is one of the highest-concentration 1099 markets in the country. Three forces compound:
- Tech corridor consulting. Apple's North Austin campus, Tesla's Gigafactory in southeast Travis County, Google's downtown footprint, Indeed, Oracle, and Dell's Round Rock campus all rely heavily on 1099 contractors for engineering overflow, security, design, and DevOps work. When the 2024–2025 tech layoff cycle hit, thousands of Austin W-2 engineers became 1099 consultants overnight — many still are.
- Real estate, by volume. The Austin Board of REALTORS lists roughly 16,000 active members across the metro. Every one is paid 1099 commission income. ABoR plus surrounding-county boards push the Central Texas 1099 real estate population past 25,000 — one of the largest concentrations in the country.
- Healthcare contracting. Dell Medical School, Ascension Seton, St. David's HealthCare, and the rapid expansion of Austin Regional Clinic have created sustained demand for 1099 locum-tenens physicians, traveling nurses, CRNAs, and physician assistants. Many work multiple Austin hospital systems on 1099 alongside a W-2 base.
What that means on the mortgage side: the typical Austin 1099 borrower I see isn't a side-hustler. They earn $150K to $400K+ annually, often from multiple payers, and they've been told by banks they "don't qualify" because their tax-return-derived income doesn't reflect what they actually earn. 1099-only is the program that matches the income they receive against the loan they actually qualify for.
And the price of entry keeps climbing. The Austin–Round Rock–San Marcos median sale price was $450,000 in June 2026 (Unlock MLS). At that price level, the gap between a contractor's tax-return income and their real 1099 income is often the exact thing that decides whether they clear underwriting or get a decline.
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 simpler than most articles make it. What varies is how the payer is documented.
- Standard: 10% flat expense factor on a 1099-NEC or 1099-MISC issued to you personally. Every program I place uses this figure.
- Waived: 0% when the paying company confirms in writing that you carry no job-related expenses. Two of my programs allow this.
- Documented: a lower actual ratio supported by a CPA certification, on one program.
- 1099-K: payment-processor forms report gross flow including refunds and fees, so they get a 50% factor or a reconciliation to a P&L. If most of your income arrives that way, a bank-statement or P&L program usually qualifies you for more.
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. On the conventional side, Fannie Mae underwrites a 1099 contractor as self-employed and qualifies you on net profit after expenses under its Selling Guide self-employment rules — which is exactly why write-offs that cut your net also cut your conventional approval. 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.
For context: the conventional 30-year benchmark averaged 6.58% the week of July 23, 2026 (Freddie Mac PMMS). A 1099-only file typically prices a fraction of a point to a point-plus above that, depending on credit, LTV, and the investor. I shop the file across multiple capital partners to keep that spread as tight as your numbers allow — the expense factor and the program (1-year vs 2-year) move it more than most borrowers expect.
| 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.
Where Austin's 1099 Borrowers Cluster — Buying Patterns by Suburb
Eight years of files in this market — clusters are predictable.
- Cedar Park and Leander — Apple, Indeed, and Apple-adjacent contractors. Lower-tax Leander ISD plus new-construction inventory in Travisso, Crystal Falls, and Santa Rita Ranch. Typical 1099-only file here: tech contractor earning $180K–$280K on 1099, buying $500K–$800K.
- Round Rock and Pflugerville — Dell Round Rock alumni and current Dell-adjacent consultants. Heavy real estate agent population too. Typical file: 1099 sales rep or tech consultant, $400K–$600K purchase, often coming from a higher-priced central Austin home in a downsize.
- Westlake and Bee Cave — executive consultants, healthcare specialists, and HNW 1099 borrowers. Eanes ISD draw. Jumbo + 1099 combinations are common here; we often layer 1099-only with asset depletion qualifying for higher-loan files. Run the asset-depletion calculator →
- Dripping Springs and Hill Country — remote tech consultants, semi-retired professionals on contract work, and wedding-venue or STR owner-operators. 1099 income is often layered with rental income on these files (DSCR adjacent).
- East Austin and central neighborhoods — creative agency contractors, freelance designers, and tech-adjacent gig workers. Smaller loan amounts ($350K–$550K) on older housing stock.
The point isn't that one suburb is better than another for 1099 borrowers. It's that every Central Texas market has its dominant 1099 profile. I price the loan against the borrower's actual income pattern, not against generic Texas pricing assumptions.
1099-Only Mortgage FAQ — Texas
A Non-QM loan that qualifies you on one or two years of 1099-NEC or 1099-MISC income with a flat 10% expense factor, instead of tax returns or Schedule C. Gross 1099 income, less 10%, divided by the months in the period, is your qualifying income. You cannot own the company that pays you.
Gross 1099 income times 0.90, divided by 12 or 24 months. $180,000 of 1099 income over 12 months qualifies at $13,500 a month. Two programs I place waive the 10% when the payer confirms in writing that you have no job-related expenses; one allows a lower documented ratio with a CPA certification. A 1099 issued to your business rather than to you needs a preparer’s expense letter.
Both options exist, and the one-year option is a documentation shortcut, not a history shortcut. It still requires two years with the same payer or in the same industry, tax transcripts, and year-to-date pay records or two to three months of bank deposits showing at least 90% of the prior year’s income. If you moved from W-2 to 1099 in the same line of work within the last 12 months, the one-year option is your route.
Bank statement loans review 12 or 24 months of deposits and apply a 50% default expense factor, or a 15% to 85% schedule by business type, or a documented ratio. 1099-only skips the deposit review and applies a flat 10% to the forms. If your income is clean 1099 from payers you don’t own, 1099-only is simpler and qualifies you for more; if it runs through Stripe or PayPal or a company you own, bank statements or a P&L usually win.
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.
660 minimum on the programs I place, at reduced leverage. 700-plus for the one-year option and better pricing; 720-plus for 90% loan-to-value on a primary purchase.
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, so bank statements are better. (2) Your true expenses are well above 10% and you need a CPA-prepared P&L to qualify accurately, so P&L only fits. (3) Your conventional qualifying income is actually higher because your write-offs are small, so a conventional loan wins and saves the rate premium.
10% on a primary-residence purchase with 720-plus credit and two years of 1099 history, on the programs I place. 20% is the common entry point and opens the widest pricing. Cash-out caps at 80% loan-to-value. Loan amounts above $2 million require 20% or more and 6 to 12 months of reserves.
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.
Yes — 1099-only programs are available throughout the Austin metro, including Round Rock, Cedar Park, Leander, Georgetown, Westlake, Bee Cave, Dripping Springs, Pflugerville, and surrounding counties. Texas is one of the strongest 1099-program states because there's no state income tax — lender underwriting math doesn't have to back into state-tax assumptions. Pricing is competitive across the metro.
No — the qualifying loan is for any Texas property, not tied to where you live now. I close 1099-only files for Austin metro buyers relocating from California, the Northeast, and other high-tax markets every month. What matters for underwriting is that your 1099 income is documented and consistent, and that the property securing the loan is in a state where I'm licensed.
That's a strength, not a problem. Lenders prefer multiple 1099 payers because it shows your income isn't dependent on one client. Apple-Austin, Indeed, Tesla, Dell, Oracle, Google Austin, and the dozens of mid-stage Austin startups all issue 1099-NEC to contractors. We combine the 1099s, apply the expense factor, and use the total qualifying income. Three to five payers is common in Austin tech consulting and underwrites cleanly.
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 Kyber Mortgage Corporation dba HyperSmart Home Loans, NMLS #2653540. 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. No tax returns, no transcripts, no 4506-T. I qualify you on the income you actually earn. — Adam
Review My 1099 Income Book a CallOr call (512) 956-6010 — NMLS #513013
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