1099 Loans for Floridians
1099 loans are designed for borrowers who earn income as independent contractors or non-W2 employees. These programs are commonly used by self-employed professionals, commissioned workers, and contractors throughout Florida.
Importantly, being paid on a 1099 does not automatically mean a borrower must use a 1099-only loan. Many 1099 earners qualify for traditional mortgage programs depending on income history and documentation.
What Is a 1099 Mortgage Loan?
A 1099 mortgage loan is a non-QM financing option that allows borrowers to qualify using 1099 income forms rather than full tax returns. These loans are typically used when tax returns do not reflect a borrower’s true earning capacity.
1099 loans differ from conventional and government-backed loans in that they offer alternative income documentation for borrowers with strong gross income but significant deductions.
Who 1099 Loans Are Best For
1099 loans are often best suited for:
Independent contractors
Commission-based professionals
Borrowers with limited tax return history
Self-employed individuals with recent income growth
Borrowers whose deductions reduce qualifying income on tax returns
However, not all 1099 earners need a 1099 loan.
Down Payment Options and Mortgage Insurance
Down payment requirements for 1099 loans vary based on credit profile, occupancy type, and loan structure. These loans typically require higher down payments than traditional programs.
Mortgage insurance is generally not required, which can simplify monthly payments and long-term planning.
Stronger credit profiles and higher down payments may improve loan terms.
Credit, Income, and Qualification Guidelines
Qualification depends on how the borrower’s income is documented.
Traditional loan options:
Borrowers with two years of 1099 income history and filed tax returns may qualify for conventional, FHA, or other traditional loan programs.1099-only loan options:
Some programs allow qualification using 1099 forms alone, often with one or two years of 1099 income depending on the situation.Credit:
Minimum credit score requirements vary by program.
Choosing the correct structure depends on income consistency, documentation, and overall financial profile.
1099 Loans for Purchase and Refinance
1099 loans may be used for:
Home purchases
Rate and term refinances
Cash-out refinances (subject to program guidelines)
Eligible occupancy types may include primary residences, second homes, and investment properties depending on the program.
Seller Concessions
Seller concessions may be permitted on 1099 loan purchase transactions, subject to program limits and market conditions. When allowed, concessions can help offset closing costs and prepaid expenses.
Limits vary based on loan structure and property type.
1099 Loans With Down Payment Assistance
While many down payment assistance programs require traditional financing, some Florida programs may be compatible with 1099 borrowers depending on income structure and program guidelines.
Eligibility varies, and not all assistance options apply.
How 1099 Loans Compare to Other Programs
1099 loans are often compared to:
Conventional loans using tax returns
FHA loans with standard income documentation
Bank statement loans
Profit & Loss loans
Each option serves a different borrower profile, and the right choice depends on how income can be documented most effectively.
Talk With a Florida Mortgage Professional
1099 borrowers often have multiple loan options available. Structuring the loan correctly from the start helps avoid unnecessary restrictions and ensures the best possible outcome.
Speaking with a Florida mortgage professional helps determine whether a traditional program or a 1099-specific loan is the best fit.
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