1099 & Independent Contractor
1099 mortgage loans in Ohio for independent contractors — qualify on what clients paid you.
If you get a 1099 instead of a W-2, the IRS considers you self-employed, and so does every mortgage underwriter. That usually means your loan is sized on what's left after write-offs, not on what clients actually paid you. I lived on self-employed income before I wrote my first loan, so I know that gap from my own tax return. There's a loan that closes it, and there's a case where you don't need it at all. Here are both.
Closings average about 13 days · No SSN or credit pull to start
The 1099 problem, in plain numbers
Contract work rewards good tax habits. Mileage, the home office, the phone, the laptop, health insurance and a retirement contribution all come off your Schedule C, and every dollar deducted is a dollar a conventional underwriter can't count. So the contractor who billed $120,000 can walk into a bank with a return showing $66,000 and be approved like someone who earned $66,000. A 1099 mortgage loan fixes that one specific problem. It reads the 1099s your clients filed instead of the return your accountant optimized.
1 – 2 yrs
Of 1099s, no tax returns
Up to 90%
Of gross 1099 income counted on some programs
600 – 640
Typical credit minimums
Up to 90%
Financing at top credit tiers
Sources: lender program pages (Angel Oak, Lendz Financial, Unconventional Lending), 2026. Terms vary by lender and are not an offer.
Same contractor, three ways to count the income
Here's one illustrative independent contractor: $120,000 in 1099s for the year, about $10,000 a month landing in a single checking account, and a Schedule C that shows $66,000 after deductions. Each loan type sees a different person:
Illustrative figures, not a quote. For a low-expense contractor paid on clean 1099s, the 1099 method counts the most. For a contractor with heavy real expenses, the Schedule C is closer to the truth, and conventional pricing wins.
The honest version: a 1099-only loan is non-QM, and the rate is somewhat higher than conventional. If your Schedule C already supports the house you want, take the conventional loan and the better rate. I'll price both, side by side, before you pick. The 1099 program earns its keep only when the write-offs are what's standing between you and the approval.
Your options as a 1099 earner
| Option | Income document | How income is counted | Best for |
|---|---|---|---|
| Full-doc conventional or FHA | Two years of signed returns or IRS transcripts (12 months in some cases) | Schedule C net profit, after write-offs, averaged | Contractors whose net profit already supports the payment. Best rates. |
| 1099-only (non-QM) | 1 – 2 years of 1099s plus a year-to-date earnings statement. No tax returns. | 1099 totals ÷ 12 or 24. Some programs count up to 90% of gross. | Nurses, consultants, designers, agents, drivers: few payers, clean 1099s, low real expenses |
| Bank statement (non-QM) | 12 or 24 months of bank statements | Deposits, with a 50% default expense factor on business accounts | Cash and card businesses, many small jobs, income that never generates a 1099 |
| CPA-prepared P&L | A profit-and-loss statement from a CPA or tax preparer | P&L net income | Lumpy revenue, several accounts, or a mix of 1099 and non-1099 work |
The conventional row deserves more credit than people give it. Fannie Mae generally wants two years of self-employment history. It accepts one when your latest return shows a full 12 months in the current work and you earned the same or more doing similar work before. So a nurse who moved from staff to contract, or a real estate agent who switched brokerages, can often qualify on one year and conventional pricing. That's the first thing I check.
Requirements at a glance, 2026
- 1099 history: one or two years on 1099-only programs, plus a year-to-date earnings statement. Some lenders want the payer relationship itself to be about two years old.
- Credit: program minimums from about 600 to 640. Pricing and financing improve at 700, 720 and 740.
- Down payment: as little as 10% at the top credit tiers, and more below them. Up to 90% financing is the ceiling on the programs I see.
- Reserves: a few months of payments after closing, rising with the loan amount.
- Property: primary residence and second home on every program, and investment on many. For a pure rental, a DSCR loan in Ohio is usually simpler.
- Loan amounts: roughly $125,000 – $150,000 minimums up to $3 million or more. That matters in California far more than in Cincinnati, where the July 2026 median sale price was $329,450.
Who I see this work for in Cincinnati and across Ohio
A lot of Ohio's paychecks don't look like paychecks anymore: contract and travel nurses picking up shifts across the region's hospital systems, real estate agents on 1099 commission, IT and engineering consultants billing through their own LLC, rideshare and delivery drivers, insurance agents, personal trainers, hair stylists renting a chair, and the tradespeople who left a shop to run their own truck. They earn real money and keep real books. A bank looks at the tax return and tells them they earned half of it.
Before mortgages, I co-founded a clothing brand and ran delivery and logistics work. My income arrived like yours: irregular, self-reported, and taxed down to the bone. So when a contractor tells me their situation is "complicated," I usually hear a file I know how to place, and I know which lender's rules fit it.
- 1 Day 1
The two-number check
Your total 1099s and your Schedule C net. If the Schedule C supports the house, we go conventional. If it doesn't, we price the 1099 program. Five minutes, and no credit pull for a scenario.
- 2 Week 1
1099s in, lender matched
One or two years of 1099s plus a year-to-date statement. I match the file to the lender whose history and expense rules fit how you're paid.
- 3 Under contract
Appraisal & underwriting
Non-QM underwriting is more manual, so a clean file matters twice. My closings average about 13 days from application.
- 4 After closing
The refinance check
Once two strong years are on your returns, we look at moving you to a conventional rate. You're not stuck in non-QM.
What to have ready
- Your 1099s for the last one or two years, whichever forms your payers send
- A year-to-date earnings statement or invoice summary for this year
- Your last two tax returns, if you have them. We use them to check whether conventional works first.
- Roughly what you want to spend, and what you have for the down payment and reserves
If your deposits tell the story better than your 1099s, the bank statement loan in Ohio is the better route, and I'll tell you so on the first call.
Figures current as of October 2026. Programs change, and I re-verify everything at application.
Napkin math, upgraded
What does your 1099 income buy?
Take your total 1099s for the year, divide by 12, and enter about 90% of that as monthly income. That's how some 1099-only programs count it. Then compare with your Schedule C net profit divided by 12, which is the conventional number.
Illustrative estimates only — not a rate quote, an offer, or a commitment to lend. Your actual figures depend on your full scenario. More tools on the calculators page.
Real questions
Things people ask Zach about this
Can I get a mortgage with only 1099 income?
Yes, two ways. A conventional or FHA loan works on your tax returns: the underwriter uses your Schedule C net profit, usually averaged over two years. A non-QM 1099-only loan skips the tax returns entirely and qualifies you on the 1099 forms themselves, with one or two years accepted depending on the lender. Which one is better depends on how much your write-offs shrink your net profit. If they barely shrink it, conventional is cheaper. If they cut it in half, the 1099 program can approve a loan conventional won't.
How is income calculated on a 1099-only loan?
From the 1099s, not the tax return. Typical methods: total two years of 1099 income divided by 24, or the most recent year's 1099 divided by 12, with a year-to-date earnings statement. Some programs then count up to 90% of that gross figure to allow for business expenses. Others set an expense factor based on your line of work. There's no single industry rule, which is why the lender I place you with matters as much as the program.
How many years of 1099s do I need?
One or two years on most 1099-only programs, and some want the payer relationship itself to be about two years old. Conventional is stricter: Fannie Mae generally wants a two-year history of self-employment income. It accepts 12 months when your most recent return shows a full year in the current work and you earned the same or more doing similar work before. A nurse who went from staff to contract, or an agent who moved brokerages, often fits that exception.
What credit score and down payment do 1099 loans need?
On the 1099-only programs I see, minimum scores run from about 600 to 640, and the down payment drops as the score climbs. Common tiers are 10% down at 720 to 740-plus and 15% to 25% down below that, with up to 90% financing at the top tiers. Reserves of a few months' payments are standard and grow with loan size. Terms vary by lender. That's a range, not an offer.
Is a 1099 loan the same as a bank statement loan?
No. They're cousins. A bank statement loan qualifies you on 12 or 24 months of deposits, and a 50% expense factor is the default on business accounts. A 1099 loan uses the forms your clients send you. If your money arrives through clean 1099s from a few payers, the 1099 route usually counts more of it. If you take cash, card payments or lots of small jobs that never generate a 1099, the bank statement loan is the one that sees your real income.
I'm paid commission on a W-2. Is that a 1099 loan?
No, and that's good news. Commission paid on a W-2 isn't self-employment, so it's documented with your paystub and two years of W-2s. Fannie Mae recommends a two-year history and can accept no less than 12 months. That's a standard conventional or FHA file at standard pricing. The 1099 programs are for people the payer doesn't treat as an employee.
Keep reading
Related lending
Bank statement loans in Ohio — when your deposits tell the story better than your 1099s →Conventional loans in Ohio — when your Schedule C is strong enough to qualify at the best rate →FHA loans in Ohio — 3.5% down for contractors with two years of returns →DSCR loans in Ohio — rentals that qualify on rent, with no income documents →Ohio mortgage calculators — affordability, payment and rent-vs-buy →Where Zach lends
1099 mortgage loans across Ohio & California
No pressure, no credit pull
Run your 1099 mortgage loan scenario by Zach.
Send the shape of it — what you’re buying, roughly what you earn, where you’re at. Zach reads every one personally and gets back to you the same day, nights and weekends included.
Nothing sensitive lives on this form: no Social Security number, no paperwork, and your credit isn’t touched until you say so. Equal Housing Opportunity. Zachary Bates, NMLS #2687902 · Coast2Coast Mortgage, NMLS #376205.