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You do the work. The client sends you a 1099. Your income is documented right there on the form — and then a lender runs your tax return, sees all the deductions you legally take, and tells you your income is too low to qualify. That’s not a problem with your income. That’s a problem with the program they’re using. A 1099 loan uses the right document from the start.
Education

What Is a 1099 Loan?

A 1099 loan is a mortgage that qualifies your income using your 1099 forms — the 1099-NEC or 1099-MISC you receive from clients — rather than a tax return or W2. The lender takes your gross 1099 income from the past one to two years, averages it monthly, and uses that figure to qualify you. No Schedule C, no deductions applied, no adjusted gross income calculation working against you.

The 1099 loan program was built for exactly the gap that exists between how independent contractors earn money and how the traditional mortgage system measures it. If you receive 1099 income, file your taxes correctly, and take legitimate deductions — your tax return will always understate what you actually earn. The 1099 form itself is the correction.

Home to hundreds of thousands of independent contractors, gig economy workers, real estate agents, consultants, and creative professionals — this gap affects a significant share of would-be homebuyers. If your 1099s show consistent earnings over the past year or two, there is a strong chance you qualify. Use our mortgage calculator to estimate your monthly payment →

Who 1099 Loans Are For:

  • Independent contractors
  • Freelancers & consultants
  • Real estate agents & brokers
  • Insurance agents
  • Gig economy workers
  • Creative professionals
  • Anyone with 1099-NEC or 1099-MISC income
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Qualification

1099 Loan Requirements

Straightforward qualification built around how independent contractors actually earn. Here’s exactly what we look at — and how your income is calculated.
Credit Score
620+ minimum

680+ opens better rates and terms. Score reviewed alongside income history and contractor documentation.

Down Payment
As low as 10%

10–20% depending on program, loan amount, and credit profile. Higher down payment reduces rate and expands program options.

Income Documentation
1099-NEC or 1099-MISC forms

1 or 2 years. No tax returns. No W2s. CPA letter or proof of contractor history may be required.

Contractor History
1–2 years minimum in the same field

Same-field transition from W2 employment may qualify sooner — ask your loan officer.

Debt-to-Income
Up to 50% DTI

Calculated on gross 1099 qualifying income — not the reduced adjusted gross income on your tax return.

Property Types
Primary residence, second home, investment property

Single-family, condos, 2–4 unit properties across New York, New Jersey, Connecticut, Pennsylvania, and Florida.

How Your Income Is Calculated — Three-Method Reference:

We use your gross 1099 income — not your adjusted gross income after deductions. That’s the key difference from conventional qualification.
One-Year Average
Total 1099 income ÷ 12

When income is consistent or growing year-over-year. Strongest option if recent earnings are higher than the prior year.

Two-Year Average
Total 1099 income ÷ 24

Most common method. Adds both years of 1099 gross income and divides by 24 months for a qualifying monthly figure.

The Key Advantage
Gross income used

Tax return deductions don't apply. Your 1099 gross is the qualifying number — write-offs stay where they belong, on your taxes.

Income varies year to year? Variable 1099 income — seasonal work, growing client base, new contracts — is common. We’ll use the calculation method that tells your income story most accurately. Tell us your situation.
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Why Powerhouse Solutions

Why Independent Contractors Choose Powerhouse Solutions

We’ve been qualifying 1099 earners long before non-QM went mainstream. Here’s what that means in practice.
01
We Use Your 1099 — Not Your Tax Return

Conventional lenders look at your adjusted gross income — the number after deductions. We use your gross 1099 income. That's the number on the form your client sent you. It's documented, it's real, and in most cases it's significantly higher than what your tax return shows. That gap is exactly what the 1099 program closes.

02
One-Year Option for Growing Earners

If your income has grown significantly over the past year — new contracts, expanded client base, a stronger year than the prior one — a one-year 1099 average may qualify you for more than a two-year calculation. We identify which averaging method produces your best qualifying income and use that. It's a detail that matters, and most lenders don't look for it.

03
Primary, Second Home, and Investment

1099 loans at Powerhouse Solutions can be used for primary residences, second homes, and investment properties across NY, NJ, CT, PA, & FL. Whether you're buying your first home or adding to a portfolio, you don't have to switch programs or explain your income structure twice. We handle all three under one roof.

04
Direct Lender — In-House Underwriting

Non-QM loans require a lender who actually knows the program. At Powerhouse Solutions, we originate, underwrite, and fund every 1099 loan ourselves. No broker passing your file to a lender who doesn't know how to read a 1099 correctly. Your loan officer is in the same building as the underwriter — and we close in under 30 days.

Comparison

1099 Loan vs Bank Statement Loan — Which Qualifies You for More?

Both programs skip the tax return entirely. The question is which income document tells the stronger story for your specific situation.
Feature
1099 Loan
Bank Statement Loan
Income Documentation
1099-NEC or 1099-MISC forms
12–24 months of bank deposit history
Tax Returns Required
Not required
Not required
How Income Is Calculated
Gross 1099 income ÷ 12 or 24 months
Average monthly deposits (expense factor on business accounts)
Best For
Contractors whose 1099 gross accurately reflects earnings
Business owners whose deposits show higher income than 1099s
Simplicity
Simpler — just the 1099 forms
More documentation — 12–24 months of statements
Multiple Income Sources
Multiple 1099s from different clients all count
All deposits from all sources counted (personal statements)
Minimum History
1–2 years of 1099 income in same field
2 years self-employment in same field

Not sure which program qualifies you for more? Your Powerhouse Solutions loan officer will run both scenarios and show you the numbers side by side.

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Learn About Bank Statement Loans
No credit pull. No obligation.

Your 1099 Is Enough. Let's Use It.

No tax returns. No W2s. No credit pull for the initial conversation. Quick application.
Get Started — 1099 Loan
The Powerhouse Solutions Way

How It Works
From Application to Closing

1
Quick Application

Tell us about your situation in under 2 minutes. No commitment, no credit pull.

2
Pre-Approval Same Day

Your dedicated loan officer reviews your details and issues a pre-approval letter, often the same day.

3
We Handle Everything

PHS manages the entire process from underwriting to title. You focus on finding your home.

4
Close in Under 30 Days

As a direct lender, we control the timeline. No bank delays, no middlemen.

Real Stories

What Our 1099 Borrowers Say

Independent contractors and freelancers who qualified on their 1099 income — not their tax return.

FAQ

1099 Loan FAQs

The questions independent contractors ask most. Answered straight.
Ask Us Directly
What is a 1099 loan and how does it work?
A 1099 loan qualifies your income using your 1099 forms — not tax returns or W2s. The lender takes your gross 1099 income from the past one to two years, averages it monthly, and uses that figure to qualify you. Because deductions aren’t factored in, your qualifying income is typically much higher than what shows up on your tax return.
1099 loans are designed for independent contractors, freelancers, consultants, gig economy workers, real estate agents, insurance agents, and anyone who receives 1099-NEC or 1099-MISC income. You’ll need at least one to two years of 1099 history in the same field, a 620+ credit score, and income sufficient to support the loan’s debt-to-income requirements. No W2s or tax returns required.
Income is calculated using the gross amounts on your 1099 forms — not the net income after expenses on your tax return. For a two-year average, the lender totals your gross 1099 income from both years and divides by 24 months. If your income grew significantly last year, a one-year average may qualify you for more. Your Powerhouse Solutions loan officer will identify which calculation method produces your strongest qualification.
Multiple 1099s from different clients are all counted and combined. As long as the work is in the same field or clearly part of your ongoing contracting career, the income from each client is included in your qualifying total. This is actually an advantage — contractors with diversified client bases often show stronger income stability than those dependent on a single source.
Both skip the tax return entirely, but they use different documentation. A 1099 loan uses your 1099 forms directly — simpler to document and ideal if your 1099 gross accurately reflects your earnings. A bank statement loan uses 12 or 24 months of deposit history, which may show higher income if you receive payments through business accounts. Powerhouse Solutions offers both and can run the numbers on each to show you which qualifies you for more.
Yes. 1099 loans can be used for primary residences, second homes, and investment properties. Requirements and down payment minimums vary by property type. For investment property purchases, additional reserves may be required.
Most programs require one to two years of contractor history in the same field. A CPA letter or proof of business existence may be required. If you recently transitioned from W2 employment to contracting in the same industry, some programs allow for a shorter history — ask your Powerhouse Solutions loan officer about your specific situation.
At Powerhouse Solutions, most 1099 loans close in under 30 days. We underwrite in-house and have direct experience with non-QM documentation — we don’t hit the delays that slow down lenders less familiar with the program. Your dedicated loan officer manages the process from application through closing.
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Get Started — 1099 Loan
516-829-2900