1099 Mortgage
What is a 1099 Mortgage?
A non-QM mortgage that qualifies independent contractors using their 1099 forms — no personal tax returns required.
A 1099 mortgage is a non-QM home loan that qualifies a borrower using IRS Form 1099s instead of personal tax returns. It’s designed for independent contractors, freelancers, gig workers, real-estate agents, contract physicians, consultants, sales reps on commission, and anyone else whose income arrives as non-W-2 1099 payments.
Independent contractors typically write off legitimate business expenses on their tax returns — home office, equipment, vehicle, software, travel — which dramatically lowers their taxable income but doesn’t actually reflect their spending power. A conventional Fannie/Freddie lender looking at the 1040 sees someone earning “not much,” while the contractor’s actual cash flow is fine.
The 1099 program solves this by qualifying on the gross 1099 income with a fixed, transparent expense ratio applied. The borrower doesn’t have to itemize expenses; the lender doesn’t have to interpret a complex Schedule C; and everyone agrees on a clean income number that’s close to economic reality.
How a 1099 Mortgage works at Total Quality Lending
Total Quality Lending’s 1099 mortgage (under the Prime Time non-QM program) takes the gross income from 1 or 2 years of IRS Form 1099s and applies a fixed 10% expense ratio. The resulting net is averaged over the document period (12 or 24 months) to produce qualifying monthly income.
The 1099 income lives in the “Standard Doc / Bank Statement / 1099” column of the Prime Time LTV matrix. Primary residence reaches up to 90% LTV at 720 or 700 FICO on the ≤$1.5M loan tier; investment property reaches up to 85% LTV at the same credit/loan tier. The exact LTV depends on the borrower’s FICO, loan amount, and occupancy.