Available on Prime, Super Prime, and Apex Prime
A 1099 mortgage loan helps self-employed borrowers, independent contractors, freelancers, consultants, and other 1099 earners qualify for home financing using 1099 income documentation.
AD Mortgage’s 1099 loan program is designed for borrowers whose income may not fit traditional W-2 or full tax return requirements. Eligible borrowers may use recent 1099 forms and year-to-date income documentation to show stable income and qualify for a Non-QM mortgage.
This program is available for owner-occupied homes, second homes, and investment properties, with loan amounts up to $4 million and up to 85% CLTV for purchase
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A 1099 mortgage loan is a Non-QM loan option for self-employed borrowers, independent contractors, freelancers, and other borrowers who receive income reported on IRS Form 1099. Instead of relying on full tax returns, the program may allow eligible borrowers to qualify using their 1099 income documentation.
Yes. Eligible borrowers may qualify for a mortgage using 1099 income if they can document stable income, meet credit and reserve requirements, and show the ability to repay the loan.
A 1099 loan program may be a fit for self-employed borrowers, independent contractors, consultants, sales professionals, freelancers, and gig workers whose income is reported through 1099 forms instead of W-2 wages.
Yes. Instead of tax returns, A&D uses the actual wages from their 1099 form as qualifying income for their new 1099 loan.
Documentation for the 1099 mortgage is quite minimal, but includes:
1099s for the last 1 year from the same employer – Stability is the key to getting mortgage approval.
Paystub showing their YTD income -OR- Acknowledgement from their employer that their 1099 income matches what they report help us to know they can afford the loan. If they do not have a YTD paystub, a written Verification of Employment works too.
Proof that they do not have mandatory expenses – Mandatory job expenses differ from the optional expenses they write off.
Letter from their CPA regarding their expenses –Most 1099 contractors have expenses – it comes with the territory.
All borrowers, regardless of their credit score, need 3 months of reserves on hand for 1099 loan. Reserves are money they have available (liquid assets) after they pay their down payment and closing costs. It is like an emergency account, letting us know they can cover at least 3 months of mortgage payments if something happens.
To qualify, they will need 3 months of principal, interest, real estate taxes, homeowner’s insurance, and HOA dues in a liquid account such as checking savings, CDs, or liquid investments.
If your borrowers are contractors, salespeople, or consultants, they deserve mortgage financing just as much as someone with a salaried (W-2) position. If they can prove they can afford the loan and their income is steady, they deserve the same loan treatment.
The 1099 loan makes it a lot easier to secure a mortgage despite working as a 1099 employee. With no prepayment penalties on owner-occupied homes or second homes and the allowance of up to 6% of the purchase price for closing costs from interested parties, we make it easy to secure financing to buy a home as a 1099 employee.
To get a loan with 1099 income, borrowers typically need recent 1099 forms, year-to-date income documentation, proof of income stability, and other standard mortgage documents. AD Mortgage allows 1099s for the last 1 year, with a 1-year history with the same employer.
