"Can I Qualify for a Mortgage on My 1099s Without Tax Returns?"

At the end of January, a 1099 arrives from each company that paid you last year. It shows what that company paid you in total, before your mileage, your phone, your home office and everything else your tax preparer deducts. On a 1099 Only loan, that top-line number, less a flat ten percent, can become the income your mortgage is built on.

Yes. A 1099 Only loan qualifies you on your 1099s without using your tax returns as the income document. Under Luxury Mortgage Corp.'s Simple Access guidelines, version 9.2, the lender takes your 1099 income, subtracts a 10% expense factor and averages it, with two years of work history verified. One kind of 1099 income cannot count at all: pay from a business you, a co-applicant or your family owns.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, NMLS #483943, through C2 Financial Corporation. Luxury Mortgage Corp. is one of the wholesale lenders I work with. The 1099 rules in this article come from Section 5.3 of its Simple Access Product Suite Underwriting Guidelines (Wholesale), version 9.2, dated July 8, 2026 and revised July 31, 2026, on pages 45 and 46. Other lenders write their own 1099 programs with their own expense factors and limits, so please read this as one lender's published method.

The more familiar road is the tax-return road, where a 1099 earner is documented as self-employed. How a 1099 contractor qualifies with tax returns walks through that version on conventional, FHA and VA loans. Fannie Mae's Selling Guide, in section B3-3.5-01 on self-employed income, lets the lender verify income from "signed federal income tax returns ... for the past two years (with all applicable schedules attached)", and the lender analyzes the business income or loss reported on those returns. On the 1099 Only program, the lender starts from your 1099s and applies its own flat expense factor instead.

How does a 1099 only mortgage work?

Section 5.3.1 describes the program in one sentence. It is "designed for Applicants who receive compensation either in the form of commission or on an independent contractor basis and receive IRS form 1099 at year end."

A real estate agent paid by a brokerage, an insurance producer paid by an agency and a consultant who bills one or two firms can all receive 1099s. If you are on commission, how commission income is calculated on W-2 and 1099 pay explains why the form your commission arrives on decides which road you are on.

Your 1099 income has to carry most of the file. The guideline says your "primary income source (>50% of qualifying income) must be income as calculated on 1099s provided less applicable expense ratio." In plain terms, after the ten percent comes off, the 1099 income has to be more than half of all the income you are qualifying with.

Someone applying with you can add their own income. Section 5.3.3 says full documentation from a co-applicant who does not rely on 1099s may be used to supplement the 1099 income. A spouse with a W-2 paycheck, for example, would document that paycheck the standard way and add it in.

If part of your contractor pay comes on a W-2, Section 5.3.1 lets that W-2 pay be included. To use it, you will need a letter from your CPA, an enrolled agent (a tax professional credentialed by the IRS) or a licensed tax preparer. The letter has to verify, in the guideline's words, that "the W-2 income is not the result of employment income." The guideline says that letter is good for 60 days.

The 1099 income that cannot count: your own company or a family business

Section 5.3.1 draws one firm line. The guideline says "The 1099 income used to qualify may not come from a source owned by any of the Applicants on the loan file nor from a family owned business."

That rule turns on who owns the company that pays you. If you own an S corporation or an LLC and it pays you on a 1099, that income cannot be used on this program. The same is true if your co-applicant owns the company. It is also true if the company belongs to your family, such as a parent's roofing business or a brother's medical practice that pays you as a contractor.

If your 1099 comes from your own business, the other routes are the ones to look at. How self-employed income is counted from your tax returns covers the full-documentation side, and the bank statement loan, which counts twelve months of deposits is a separate program from the same lender that qualifies business owners on their deposits.

The guideline rules out one more category. Section 5.3.1 says "Any income sources that are illegal under local, state and/or federal law are not eligible under this product."

How is income calculated on a 1099 only loan?

Section 5.3.2 gives the arithmetic. "A 10% expense factor will be utilized against the 1099's used to qualify for purposes of calculating income." So $100,000 on your 1099s becomes $90,000 of income for the lender's math, whatever your actual expenses were.

With two years of 1099s, the direction of your gross receipts decides the averaging period. The guideline says "a 24 month average of net income shall be utilized in the event of stable or increasing gross receipts. A 12 month average of net income shall be utilized in the event of declining gross receipts."

If your second year was as good as your first or better, both years are averaged over twenty-four months. If your second year came in lower, the lender moves to a twelve-month average. On a real file, I would confirm with the underwriter exactly which twelve months they are using before we count on a figure.

This year has to line up too. The section says "Year to date gross receipts should support the 1099s supplied and relied upon to qualify."

The monthly figure that comes out of this is the income used in your debt-to-income ratio, alongside your debts and the new housing payment.

Documents for a 1099 only loan

Section 5.3.1 lists what the program requires. I would take it in this order.

1. Once you're ready, please provide your 1099s for the most recent two years, every form from every company that paid you, please. The guideline asks for the most recent one or two years of 1099s, and says the 1099s should cover a complete calendar year.
2. Two years of employment history has to be verified, "via either a written VOE, CPA's letter, or other documentation relevant to the Applicant's circumstances." A written VOE is a written verification of employment, completed by the company that pays you. The same paragraph also says "The re-verification shall be good for 60 days," without naming which document it covers, so I would ask the underwriter what it applies to if your closing could run long.
3. The lender gets IRS transcripts of your 1099s and any W-2s. A transcript is the IRS's own record of the forms reported under your name.
4. If you close more than 120 days into the calendar year, which lands around the end of April, you will also need proof of this year's income dated within 120 days of the note date. The note date is the date on the promissory note you sign at closing. For that proof, please provide a check stub or the checks themselves, or bank statements showing what you have received this year. If you send bank statements, please provide all pages, even if the last page is intentionally left blank. A profit and loss statement you prepare yourself can support the 1099s, though the guideline says it does not count as qualifying income.
5. The Simple Access version also asks for a business narrative, a short description of the work you do and how you get your business.

Two situations change the transcript step. If transcripts of your 1099s are not available, or the 1099s were issued to your LLC or company instead of to you, the guideline asks for bank statements "showing at least 90% gross receipt income" paid to you or to your LLC. It also asks for documentation that the transcript pull was attempted. For those statements, please provide all pages, even if the last page is intentionally left blank.

If the 1099s were issued to your company, Section 5.3.1 also requires your ownership of that company to be 100%, documented through a CPA letter or equivalent documentation.

Common mistakes on a 1099 only file

Counting a 1099 from your own company is the one I would check first. It feels like ordinary 1099 income, and under Section 5.3.1 it cannot be used on this program at all.

Working the numbers at the full 1099 amount is another. The ten percent comes off every dollar before anything gets averaged, so a worksheet built on the gross figure will come out high.

Averaging two years after a down year can also surprise you. A lower second year moves the calculation to a twelve-month average, and the result can be noticeably lower than the two-year figure you had in mind.

Past the 120-day mark, the file needs proof of what you have been paid so far this year, so it helps to have your check stubs or statements gathered before the file goes in.

An illustration, with made-up numbers

Numbers below are made up to show the mechanism. They do not describe a real client, and they are not a quote.

Say you are an independent insurance producer, and the agencies that pay you are not owned by you or your family. Your 1099s look like this:

Year one 1099s                         $132,000
Less 10% expense factor                -$13,200
Year one net                           $118,800

Year two 1099s                         $144,000
Less 10% expense factor                -$14,400
Year two net                           $129,600

Gross receipts increased: 24-month average
($118,800 + $129,600) / 24              $10,350 per month

Now say your second year had come in at $120,000 instead. Gross receipts declined, so the guideline moves to a twelve-month average. If the underwriter uses the most recent year, $120,000 less ten percent is $108,000, which works out to $9,000 per month.

If you compare that with the tax-return road, the gap shows up quickly. If your tax preparer deducted $45,000 of expenses against $144,000 of 1099 pay, your Schedule C would show $99,000 of net profit for that year. The 1099 Only math above starts from $129,600 for the same year. Your own deductions and add-backs would change the tax-return figure, so the comparison is worth running on your own file.

The same 1099 method on a second mortgage

Luxury Mortgage Corp. carries the same 1099 Only section in its Simple Seconds guidelines, version 3.0, dated May 12, 2026, in Section 5.3 on pages 36 and 37. Simple Seconds is a second mortgage product, and Section 10.2 of those guidelines says the lien must be in second position, which means it is paid after the first mortgage you already have. The same 10% expense factor, the same averaging and the same rule about your own and family-owned companies apply. Second mortgages and HELOCs explains how a second lien works alongside the loan you already have.

The 1099 Only program is one of several in the non-QM loan family, alongside bank statement, DSCR and asset-based lending.

Talking through your own 1099s

The 1099 Only program is not priced in the rate tool on this site. You are welcome to call me at (843) 765-0000 or email me at jeff@solverya.com, and we can go through your 1099s, who paid you, and how the two years compare. Section 3.6 of the same guidelines points to Luxury Mortgage Corp.'s rate sheet for state eligibility, so I will confirm the program is available where you are buying before we go any further. Comparing a 1099 Only figure against the tax-return route and the bank statement route, across lenders, is what a mortgage broker does that a single bank cannot.

Nothing here is a loan approval, a denial, a commitment to lend, or tax advice. The rules quoted come from Section 5.3 of Luxury Mortgage Corp.'s Simple Access Product Suite Underwriting Guidelines (Wholesale), version 9.2, dated July 8, 2026 and revised July 31, 2026. The second-mortgage rules come from Section 5.3 of its Simple Seconds Product Suite Underwriting Guidelines (Wholesale), version 3.0, dated May 12, 2026. The lender makes the final determination on any file, and other lenders' 1099 programs use their own rules. No letter from anyone is a loan commitment; final approval depends on the property, the appraisal and full underwriting.

Common questions

Can I get a mortgage with only 1099s and no tax returns?

Under Luxury Mortgage Corp.'s Simple Access guidelines, version 9.2 (July 8, 2026, revised July 31, 2026), a 1099 Only loan qualifies you on your 1099s less a 10% expense factor. The documentation list in Section 5.3 asks for your 1099s, IRS transcripts of them, and two years of verified work history, and it does not list tax returns. The program is designed for commission and independent-contractor income.

How is income calculated on a 1099 only loan?

Section 5.3.2 of Luxury Mortgage Corp.'s Simple Access guidelines, version 9.2, applies a 10% expense factor to the 1099s used to qualify. With two years of 1099s, net income is averaged over 24 months when gross receipts are stable or increasing, and over 12 months when they are declining. Year-to-date receipts should support the 1099s.

Can I use a 1099 from my own company or a family business?

No, not on Luxury Mortgage Corp.'s 1099 Only program. Section 5.3.1 of its Simple Access guidelines, version 9.2, says the 1099 income used to qualify may not come from a source owned by any applicant on the loan or from a family-owned business. A business owner paid by their own company would look at the tax-return route or a bank statement loan instead.

How many years of 1099 history do I need for a 1099 only mortgage?

Under Luxury Mortgage Corp.'s Simple Access guidelines, version 9.2, the documentation list asks for the most recent one or two years of 1099s, each covering a complete calendar year. Two years of employment history has to be verified through a written verification of employment, a CPA's letter, or other documentation relevant to your circumstances. The same paragraph says a re-verification is good for 60 days, without naming which document it covers.

What if my 1099s were issued to my LLC?

Under Section 5.3.1 of Luxury Mortgage Corp.'s Simple Access guidelines, version 9.2, your ownership of the LLC must be 100%, documented by a CPA letter or equivalent. If 1099 transcripts are not available or were issued to the company, the lender asks for bank statements showing at least 90% of gross receipts paid to you or your LLC, plus documentation of the attempted transcript pull.

Can a 1099 only loan be used for a second mortgage?

Yes, with Luxury Mortgage Corp.'s Simple Seconds product. Its guidelines, version 3.0, dated May 12, 2026, carry the same 1099 Only rules in Section 5.3: the 10% expense factor, the 24-month or 12-month average, and the exclusion of 1099s from your own or a family-owned business. Section 10.2 says the loan must be in second position.