How 1099 Loans Work
1099 loans allow independent contractors, freelancers, and gig workers to qualify for a California mortgage using their 1099 income forms instead of full tax returns. The lender uses 12-24 months of 1099s to calculate qualifying income. A contractor showing $15,000/month in 1099 income over 24 months qualifies at that level without needing to show the Schedule C tax return — which often shows much lower income after business deductions.
This program bridges the gap between bank statement loans (which require actual deposit analysis) and full-doc loans (which use tax return income). Independent contractors in California's tech, entertainment, real estate, healthcare, and gig economy sectors frequently earn substantial gross income that gets heavily reduced on tax returns. A rideshare driver earning $120,000 in 1099 income may show only $45,000 after vehicle depreciation and expenses. The 1099 program uses the gross figure — or a blended average with an expense factor — to qualify.
1099 Loan Requirements
Typical requirements include 12-24 months of consecutive 1099 forms from the same payer(s), minimum credit score of 660, down payment of 10-20%, at least two years of self-employment or contractor history in the same field, and a CPA or tax preparer letter confirming the business activity. Some lenders apply an automatic expense ratio (typically 10-25% for 1099 income, lower than the 50% used for bank statement business accounts). Loan amounts up to $3 million in California.
Frequently Asked Questions — 1099 Loans
What is a 1099 loan in California?
A 1099 loan qualifies independent contractors using 1099 forms instead of tax returns. The lender totals 1-2 years of 1099 income and applies an expense factor, typically 10% to 25%, rather than using the net figure from your Schedule C. Expect 10-20% down and a 620 minimum credit score. It suits contractors whose write-offs depress reported income well below actual earnings.
What credit score do I need for 1099 loans?
Most 1099 income loan programs in California look for 620+. Credit tends to affect your pricing more than your eligibility — a stronger score usually shows up as a lower rate rather than a different answer on whether you qualify.
How much down payment do I need?
A 1099 income loan in California typically requires 10-20% down. The exact figure moves with your credit profile, occupancy and property type — stronger files land at the low end of that range.
How long does closing take?
A 1099 income loan in California generally closes in 30-45 days. Appraisal turn times and how quickly you return requested documents are the two things that move that timeline most.
Can I use this program for an investment property?
A 1099 income loan is available for primary, second home or investment. Occupancy affects both pricing and down payment, so confirm the intended use up front — it changes the terms you are quoted.
Are rates higher for 1099 loans?
1099 income loan rates run roughly 1% to 2% above a comparable conventional loan, which is the cost of documenting income a different way. Your specific number depends on credit, down payment, occupancy and the day you lock.
Do I need to verify my income?
For a 1099 income loan, income is qualified on 1-2 years of 1099 forms with an expense factor applied — no tax returns. This is the main way the program differs from a standard conventional loan, and it is usually the reason borrowers choose it.
Can I refinance later into a different program?
Yes. With a 1099 income loan the usual path is to refinance into conventional once two years of filed returns show the same income. Nothing locks you in — plan the exit when you take the loan rather than after.
What documents do I need to apply?
For a 1099 income loan you will need a government ID, credit authorization and property details, plus your 1099s, a year-to-date earnings record and proof the contracting relationship continues.
How do I get started?
Call (888) 703-1840 for a free 1099 income loan consultation, or use the form on this page. Pre-approval usually takes 1-3 business days, and there is no cost and no hard credit pull to find out what you qualify for.
Related Loan Programs
What is a 1099 loan in California?
A 1099 loan qualifies independent contractors using 1099 forms instead of tax returns. The lender totals 1-2 years of 1099 income and applies an expense factor, typically 10% to 25%, rather than using the net figure from your Schedule C. Expect 10-20% down and a 620 minimum credit score. It suits contractors whose write-offs depress reported income well below actual earnings.
What credit score do I need for 1099 loans?
Most 1099 income loan programs in California look for 620+. Credit tends to affect your pricing more than your eligibility — a stronger score usually shows up as a lower rate rather than a different answer on whether you qualify.
How much down payment do I need?
A 1099 income loan in California typically requires 10-20% down. The exact figure moves with your credit profile, occupancy and property type — stronger files land at the low end of that range.
How long does closing take?
A 1099 income loan in California generally closes in 30-45 days. Appraisal turn times and how quickly you return requested documents are the two things that move that timeline most.
Can I use this program for an investment property?
A 1099 income loan is available for primary, second home or investment. Occupancy affects both pricing and down payment, so confirm the intended use up front — it changes the terms you are quoted.
Are rates higher for 1099 loans?
1099 income loan rates run roughly 1% to 2% above a comparable conventional loan, which is the cost of documenting income a different way. Your specific number depends on credit, down payment, occupancy and the day you lock.
Do I need to verify my income?
For a 1099 income loan, income is qualified on 1-2 years of 1099 forms with an expense factor applied — no tax returns. This is the main way the program differs from a standard conventional loan, and it is usually the reason borrowers choose it.
Can I refinance later into a different program?
Yes. With a 1099 income loan the usual path is to refinance into conventional once two years of filed returns show the same income. Nothing locks you in — plan the exit when you take the loan rather than after.
What documents do I need to apply?
For a 1099 income loan you will need a government ID, credit authorization and property details, plus your 1099s, a year-to-date earnings record and proof the contracting relationship continues.
How do I get started?
Call (888) 703-1840 for a free 1099 income loan consultation, or use the form on this page. Pre-approval usually takes 1-3 business days, and there is no cost and no hard credit pull to find out what you qualify for.
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Last updated: July 2026. Sources: Federal Housing Finance Agency (FHFA), HUD, VA, CalHFA, CFPB, California DRE. All loans subject to credit approval. Rates subject to change. Mortgage Guide California is an educational publisher. Sponsored by Save Financial, Inc. (NMLS #377740). Equal Housing Lender.
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