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Mortgage for a 1099 Independent Contractor
You're a top-25% real estate agent in your market. Or an attorney running solo. Or a freelance developer 1099'd through three platforms. Your gross 1099 income runs $200K+. Then a conventional lender opened your Schedule C, added back what they wanted, ignored what they couldn't categorize, and qualified you on $85K of net "self-employed income" — half of what you actually take home.
By Sunrise Lending
Why this fits you
Sunrise's 1099-only program qualifies independent contractors on documented contract income, not the depressed net that survives Schedule C math. Two years of 1099s, sometimes one year for established earners, no add-back negotiation. For 1099 earners with strong business deposits, a 24-month bank statement program may produce a higher qualifying income; the matcher checks both.
Five questions about how your contracts and deposits are structured. The matcher narrows you to 1099 or bank statement (or, for some high earners with significant liquid assets, asset depletion). A licensed loan officer reviews the recommended program before anything formal moves.
Common income structures we see
- Two years of 1099s (sometimes one year for established earners)
- Gross contract income — no Schedule C add-back negotiation
- 24 months of business deposits when the bank-statement path produces a higher qualifying income
- Liquid assets supporting asset-depletion paths for higher earners
- 1099 + bank statement hybrid when multi-platform earnings and deposits are both strong
Best-fit loan programs
How Sunrise analyzes your income
You earned $210K in gross contract income last year. Your Schedule C, after home office, mileage, professional subscriptions, health insurance, and the SEP-IRA contribution your CPA recommended, shows $115K. The conventional lender calculates qualifying income at roughly $9,600/month. On paper that's enough for a $450K loan. The house you want is $650K. The gap is your accounting doing exactly what it's supposed to do.
The 1099 loan program qualifies on gross contract income — the top line, before Schedule C deductions — using a 24-month average with a modest expense-factor adjustment (typically 5–10%). That $210K becomes $17,000–$17,850/month in qualifying income. The difference between $9,600 and $17,500 is the difference between the loan you can get on a tax return and the loan your real income supports.
When you earn through multiple 1099 payers — which is extremely common for consultants, real estate agents, and tech contractors — each 1099 is added to the gross. The program doesn't require a single primary payer or a consistent client base. Twenty small contracts or three large ones, the gross total is what qualifies.
For 1099 earners who also accumulate deposits in a business account (especially those who work under an LLC or sole-prop), the bank statement program sometimes produces a higher qualifying income than the 1099 path. The matcher calculates both. For high earners who have been building liquid wealth while earning high 1099 income, asset depletion can stack with or replace contract income in the calculation.
What the timeline looks like.
Scenario examples
Freelance UX designer, Los Angeles CA
A UX designer ran her practice under a single-member LLC with 1099s from 12 different product companies in the past 24 months. Gross 1099 income: $390K over 24 months. The 1099 program averaged that to $195K/year ($16,250/month), then applied a 10% expense adjustment — qualifying income $14,625/month. Her Schedule C showed $92K net. She purchased a $920K condo in LA with 20% down.
- 24-mo gross 1099
- $390K
- 1099 qualifying income
- $14,625/mo
- Schedule C net
- $92K/yr
- Purchase price
- $920K
Illustrative scenario. Not a commitment to lend.
Top-producing real estate agent, Dallas TX
An agent had $485K in gross commissions over 24 months. The bank statement path (her deposits averaged $22K/month × 50% = $11,000/month) was lower than the 1099 path ($485K ÷ 24 months × 92% = $18,592/month). The matcher flagged the 1099 path as the higher-qualifying option. She qualified at $18,592/month and purchased a $1.1M home with 20% down.
- 24-mo gross 1099
- $485K
- 1099 qualifying income
- $18,592/mo
- Bank statement path
- $11,000/mo (lower)
- Purchase price
- $1.1M
Illustrative scenario. Not a commitment to lend.
Common questions
Common questions
- How does a 1099 loan qualify income differently from conventional?
- Conventional underwriting opens your Schedule C and qualifies on net self-employed income after deductions — often half of gross. The 1099 loan qualifies on gross contract income from your 1099 forms over 24 months, with only a small expense-factor adjustment (typically 5–10%).
- Do I need 1099s from the same client every year?
- No. The program aggregates all 1099s over the 24-month look-back period regardless of payer. Multi-client contractors, platform workers, and anyone with variable client rosters are an explicit fit.
- What if last year was stronger than the year before?
- The program averages over 24 months, which smooths year-over-year variation. An unusually strong recent year is partially reflected. Some programs use 12-month averages for established earners with 3+ years of consistent 1099 history — ask your officer.
- Can I combine 1099 income with bank statement deposits?
- Yes — a hybrid file checks both paths and uses whichever produces a higher qualifying income, or combines them when they represent different income streams. The matcher runs both scenarios automatically.
- How is income calculated if I have 1099s from 8 different clients?
- All 1099s are summed to arrive at gross contract income. The number of payers is irrelevant. Total 24-month gross ÷ 24 months × (1 minus expense factor) = qualifying monthly income.
- Does my income need to be increasing year over year?
- Not required. Stable income or modest variation is fine. Significantly declining income (say, year 2 is 50%+ below year 1) may require explanation or affect the look-back period some lenders apply. The officer reviews the income trend during the file review.
Related resources
Tell us how you earn.
Five quick questions. No tax returns. No credit pull. The matcher narrows you to the right starting point; a licensed mortgage officer reviews before anything moves.
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.