1099 Loans
A 1099 loan qualifies independent contractors on gross 1099 income averaged over 24 months — bypassing Schedule C add-back math. No tax returns required for income calculation. Best for real estate agents, consultants, attorneys, and commission-based earners whose reported net understates actual earnings.
By Sunrise Lending
About this program
What is a 1099 Loans?
How it works — step by step
Take the 60-second check-in
Answer five questions about your 1099 income sources, how long you've been contracting, and what you're trying to do. The matcher checks whether a 1099-only path or a hybrid with bank statements produces stronger qualifying income.
Gather your 1099 documents
24 months of 1099-MISC or 1099-NEC forms from all payers. If your 1099s come from multiple clients or platforms, all are included in the gross tally. A CPA letter documenting your actual expense ratio can override the standard adjustment.
Licensed MLO reviews the income calculation
A Sunrise loan officer confirms the 24-month 1099 average, identifies whether a hybrid bank-statement path adds income, and confirms the program fit. This is the first formal conversation — nothing locks until you decide to move forward.
Underwriting on gross contract income
The lender calculates qualifying income from your gross 1099 average with an expense-factor adjustment. Schedule C is not used to calculate income. Standard underwriting proceeds from here — appraisal, title, credit review.
Close and fund
Well-organized 1099 files typically close in 30–45 days. Your licensed officer coordinates the closing timeline and keeps you informed at each milestone.
What it usually looks like
- 24 months of 1099-MISC or 1099-NEC forms (12 months may qualify for established earners with prior W-2 in same field)
- Consistent contract income from same industry (not required to be from one payer)
- Credit score typically 660+ (materially better pricing at 720+)
- Down payment 10–25% depending on property type and LTV
- No tax returns required for income qualification
- CPA letter optional — can override the expense-factor adjustment where actual ratio is better documented
- Reserves: 3–12 months PITIA depending on program and LTV
- Continuity of self-employment in the same trade or profession
How it compares
| Factor | 1099 Loan | Bank Statement Loan | Conventional |
|---|---|---|---|
| Income documentation | 24-month 1099s | 12–24 months bank statements | W-2 or tax returns |
| Tax returns required | No | No | Yes (2 years) |
| Schedule C add-back math | Bypassed — qualifies on gross | Not used | Required — reduces income |
| Ideal for | 1099 contractors, agents, consultants | Business owners w/ strong deposits | W-2 employees |
| Hybrid option | Yes — 1099 + bank statement | Can add 1099 | No hybrid |
| Min. credit score | 660 (program varies) | ~640 | 620 |
Program terms, LTV limits, and documentation requirements vary by lender. As of June 2026. Not a commitment to lend.
Real scenarios
Real estate agent, Nashville TN
A top-producing agent had gross commission income of $310K across two years of 1099-NEC forms. Her Schedule C showed $115K net after business deductions. The conventional lender qualified her on the Schedule C net. The 1099 program qualified on gross 1099 average of $155K/year — $12,917/month. She purchased a $720K home with 20% down.
- 2-yr gross 1099
- $310K
- Schedule C net
- $115K
- 1099 qualifying income
- $12,917/mo
- Purchase price
- $720K
Illustrative scenario. Not a commitment to lend.
Independent IT consultant, Austin TX
A technology consultant worked under a single-member LLC but was paid via 1099-NEC from three enterprise clients. His 24-month total was $492K. The expense-factor adjustment at 10% produced qualifying income of $18,450/month. He purchased an investment property at $540K on DSCR for the investment, using the 1099 path for a simultaneous primary residence purchase at $650K.
- 24-mo gross 1099
- $492K
- Expense-factor adj.
- 10%
- Qualifying income
- $18,450/mo
- Primary purchase
- $650K
Illustrative scenario. Not a commitment to lend.
Who this fits
Common questions
Who is the 1099 loan designed for?
Independent contractors, freelancers, real estate agents, consultants, and commission-based earners — anyone paid via 1099s. The program qualifies on documented gross contract income, not the depressed net that Schedule C add-back math produces.
How is qualifying income calculated on a 1099 loan?
Typically as a 24-month average of gross 1099 income with an expense-factor adjustment (often 5–10%). A CPA letter documenting your actual expense ratio can override the standard factor, raising qualifying income.
Do I need 2 years of 1099 history?
Most programs require 24 months. Some accept 12 months for established earners — e.g., an attorney transitioning from a firm to solo practice or a licensed agent with prior W-2 history in the same industry.
What if my 1099s come from multiple sources?
Fine. Each 1099 is added to the gross total. The program looks at total documented contract income and does not require a single primary payer. Multi-platform contractors who 1099 from multiple clients are an explicit fit.
Can I combine 1099 income with bank statement income?
Yes. For high-deposit earners, a hybrid file (1099 + bank statement) sometimes produces a higher qualifying income than either path alone. The matcher checks both configurations; the licensed officer recommends whichever funds the file better.
How does a 1099 loan compare to a conventional mortgage?
Conventional underwriting opens your Schedule C, adds back what it can categorize, and qualifies on net self-employed income — often half of gross. The 1099 program bypasses that math and qualifies on documented gross contract income.
What credit score do I need for a 1099 loan?
1099 programs typically start at 660 and improve materially at 720+. The check-in asks for a score band so the matcher narrows you to programs your profile actually qualifies for.
Does the 1099 loan work for real estate agents?
Yes — real estate agents are among the most common 1099-borrower profiles. Commission income on 1099-MISC or 1099-NEC qualifies. Two years of history is standard; one year may work with prior W-2 in the same industry.
Not sure if 1099 Loans is the right fit?
Take the 60-second check-in. The matcher narrows you to the right path; a licensed mortgage officer reviews before anything formal moves.
Related resources
Sources
- 1.Internal Revenue Service (IRS). About Form 1099-NEC, Nonemployee Compensation — Accessed June 2026
- 2.Consumer Financial Protection Bureau (CFPB). Ability-to-Repay and Qualified Mortgage Standards — Accessed June 2026
- 3.U.S. Small Business Administration (SBA). Self-Employment Statistics and Small Business Facts — Accessed June 2026
1099 program eligibility, look-back period (12 or 24 months), expense-factor treatment, and minimum 1099 count vary by lender. Final approval, terms, and rates are determined by the lender after underwriting. Not a commitment to lend.
Sunrise Lending · Equal Housing Opportunity. Matching rules are written and reviewed by licensed mortgage professionals. All loan decisions are made by licensed mortgage professionals. Not a commitment to lend. Loan approval subject to underwriting guidelines. This is not financial advice.