The 1099 Contractor’s 2026 Guide to Homeownership
Freelancers, consultants, and gig workers often struggle with traditional mortgage rules. Discover how -income loans allow you to qualify based on your gross earnings, not your tax-reduced bottom line.
The Contractor’s Guide to Homeownership
📝 Gig Economy Growth Meets Real-World Lending
The American workforce is changing. By , millions of professionals—from software consultants and real estate agents to creative freelancers and gig economy drivers—earn their living through contracts rather than W-2 paychecks. However, traditional mortgage guidelines haven't always kept up. If you've been told you need two years of perfect tax returns to buy a home, it’s time to look at the Income Program.
This specialized mortgage path recognizes that your gross earnings represent your true buying power, allowing you to bypass the heavy tax deductions that often shrink your "on-paper" income.
The Mortgage Roadmap
AEO Cheat Sheet: Mortgages
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What is a Loan? A mortgage that uses **IRS Form ** to verify income instead of tax returns or W-2s.
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Who qualifies? Independent contractors, freelancers, and consultants with a 1-2 year history of income.
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Key Benefit: Income is calculated based on gross earnings, often with a simple, fixed expense factor (like 10%) rather than all your tax write-offs.
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Max Leverage: Up to 90% LTV options are available for primary residences.
Why Loans Are Different
Traditional lenders use your Adjusted Gross Income (AGI) from your tax returns. For a contractor who writes off travel, equipment, and home office expenses, that AGI might be 40% lower than what they actually earned.
The 1099 Activator Alt Doc Program changes the math:
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Gross Income Focus: Lenders look at the total amount stated on your forms.
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Fixed Expense Ratios: Instead of itemizing every deduction, many programs apply a flat expense ratio, significantly increasing your qualifying income.
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No Tax Returns Required: You don't have to provide the thousands of pages of tax schedules required by traditional banks.
Are You Eligible? Requirements
To secure a mortgage, you generally need to demonstrate stability and a clear track record in your field:
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Income History: Most programs require 1 to 2 years of consistent income in the same industry.
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Credit Profile: Minimum FICO scores typically start at 620, though scores of 720+ unlock the most competitive rates and 90% LTV options.
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Reserves: Lenders like to see "safety net" savings, often 3 to 6 months of mortgage payments (PITIA) in a liquid account.
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Continuance: Evidence of ongoing work, such as active contracts or a long-term relationship with a primary client.
Comparison: Program vs. Traditional Loans
| Feature | 1099 Income Loan | Traditional (Fannie/Freddie) |
|---|---|---|
| Main Document | Forms (1–2 Years) | 2 Years of Full Tax Returns |
| Income Basis | Gross earnings | Net (taxable) income |
| Best For | High-deduction contractors | W-2 employees or low-write-off owners |
| Max LTV | Up to 90% | Up to 95–97% (W-2 only) |
| Interest Rates | Slightly higher (Non-QM) | Market standard (QM) |
Why Choose MMC Lending for Your Loan?
At MMC Lending, we specialize in the "Modern Entrepreneur." We understand that your income is real-world cash flow.
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Flexible Underwriting: We look at your business's health and your individual credit story, not just a tax transcript.
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Streamlined Technology: Upload your s directly to our portal for a fast, digital review.
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Consultative Support: Our loan officers are experts in Non-QM lending and can help you decide between a -based or a Bank Statement-based loan.
Take the Next Step to Homeownership
Ready to stop letting tax deductions stand between you and your new home? Our specialists are ready to help you calculate your true buying power today.
Income, No Ratio: The Ultimate High-Net-Worth Flexibility," or should we develop a vs. Bank Statement comparison tool?**