— NON-QM LOAN PROGRAMS
1099 Income
Loan Programs
Flexible mortgage solutions for independent contractors, freelancers, and self-employed borrowers using 1099 income verification.
— ABOUT NON-QM LOANS
1099 Income
Loan Programs
The mortgage industry was built around W-2 employees, but the workforce has changed. Tens of millions of Americans now earn their income as independent contractors, freelancers, consultants, and gig economy professionals, receiving IRS Form 1099 statements instead of traditional pay stubs. The conventional mortgage system routinely fails these borrowers, often dismissing their real income because it doesn’t fit a standard documentation template.
A 1099 loan is built specifically for how you actually earn. Instead of penalizing you for running a lean business or maximizing legitimate deductions, this program qualifies you on your gross 1099 income – the number that actually reflects what you make. Pacific Home Loans has been structuring 1099 mortgage loans since 2018, and our team knows exactly how to build a file that works for the way independent professionals earn.
— PROGRAM DETAILS
How 1099 Income
Loans Work
A 1099 loan replaces traditional income documentation with a direct evaluation of your 1099 earnings. Qualification is based on:
- One to two years of IRS Form 1099 statements from clients or employers
- Year-to-date earnings documentation to verify income continuity
- Two years of self-employment history in the same industry or professional field
- Gross 1099 income – evaluated before business deductions, not after
That last point is critical. Conventional mortgage underwriting uses your tax return’s net income, the number your accountant has legitimately reduced through business expenses and deductions. A 1099 loan looks at the gross figure instead, giving an accurate picture of your actual earning capacity. For many independent contractors, this difference alone opens the door to qualification.
1099 Loan vs Bank Statement Loan
Both programs serve self-employed borrowers but use different income verification methods. A 1099 loan uses IRS Form 1099 statements to verify gross income – best suited for independent contractors and freelancers who receive documented 1099 payments from clients or employers. A bank statement loan analyzes 12 to 24 months of deposit activity – better suited for business owners with income from multiple sources or cash-heavy businesses. Our team can evaluate both options and recommend the most appropriate structure based on your income profile.
— PROGRAM DETAILS
Program Features
& Flexibility
Documentation Requirements
1099 income loan programs are straightforward in terms of documentation. Most programs require:
- One to two years of the most recent IRS Form 1099 statements
- Year-to-date earnings verification (invoices, contracts, or payment records)
- Verification of two years of self-employment or independent contractor history in the same field
- Full credit profile review
No tax returns are required under most 1099 programs. Our team walks through your documentation from the first consultation so you know exactly what to prepare, and we do not request paperwork we don’t need.
Eligible Property Types
1099 income loans may be used to finance primary residences, second homes, and investment properties. Condominium properties are eligible subject to project review.
For resort-designated, condotel, or non-warrantable condominium projects that require specialized review:
→ PrimeResort™ Condo Financing
Additional documentation may be required based on underwriting guidelines and investor overlays.
— PROGRAM DETAILS
Who 1099 Loans
Are Designed For
1099 loan programs are designed to reflect the realities of independent income. Program features may include:
- Qualification on gross 1099 income – before deductions – rather than taxable income
- No tax returns required in most programs
- Eligibility for primary residences, second homes, and investment properties
- Higher loan limits than standard conforming programs in many cases
- Fixed-rate and adjustable-rate options available
Loan structure, rates, and terms vary based on borrower documentation, property type, and investor program guidelines.
When a Different Approach May Be Needed
Not every self-employed borrower is the right fit for a 1099 program. If your income comes from multiple sources that a single set of 1099s doesn’t fully capture, if you operate through a business entity with complex financials, or if your transaction involves a higher loan amount that needs additional structuring, a bank statement loan or portfolio lending solution may serve you better.
Our team makes this determination during the initial consultation – before you invest time in documentation that leads nowhere.
→ Bank Statement Loan Programs
→ Portfolio Loans & Flexible Financing Solutions
Additional documentation may be required based on underwriting guidelines and investor overlays.
— NON-QM LENDING
How 1099 Loans Fit Into the
PHL Lending Platform
Traditional Agency Financing – used when borrower eligibility meets standard requirements
↓
Alternative Documentation (Non-QM) – used for specialized borrower profiles such as ITIN qualification
↓
Portfolio Lending Solutions – used for high-value or complex transactions requiring advanced structuring
→ Non-QM Loan Options
→ Portfolio Loans & Flexible Financing Solutions
Compliance & Important Information
1099 income loans are non-agency mortgage products that may carry different pricing than conforming loans. They require full underwriting review and are subject to investor guidelines, overlays, and reserve requirements. Qualification and approval depend on borrower documentation, income verification, property eligibility, and investor criteria.
— COMMON QUESTIONS
1099 Loan
FAQ
Have a question not answered here? Our team is available to walk through your specific scenario.
