Self-Employed & 1099 Mortgage Loans

Your tax returns don't tell the real story.
We have programs that do.

Smart tax strategy writes off as much income as legally possible. Smart mortgage strategy proves you actually earn it. We use bank statements, P&L, 1099s, or asset balances to qualify you on what hits your account — not on what's left after Schedule C deductions. Licensed in 40+ states.

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The Problem

Tax returns are not
income statements.

A traditional underwriter takes your AGI off line 11 of your 1040, divides by 24 (the last two years averaged), and that's your qualifying income. For a W2 employee, AGI tracks closely with what they actually earn. For a self-employed borrower, every legitimate write-off — home office, vehicle, equipment, depreciation, retirement contributions — reduces the AGI used to qualify you.

The same person who deposits $25,000/month into their business account can show $90,000 AGI after deductions. A retail lender looks at that file and sees someone who qualifies for a $400k loan. Reality says they could service double that comfortably. Non-QM programs close the gap.

Tell Me Which Program Fits

Self-employed borrower reviewing options

Loan Programs

Four ways
to qualify.

Each program looks at a different income signal. The right one depends on how your business is structured and what documentation is cleanest for your situation.

Bank-statement loans (12 or 24 months)

We use 12 or 24 months of personal or business bank deposits as your qualifying income — typically applying a 50-70% expense ratio so the underwriter is using net business cash flow. No tax returns required. Best for sole proprietors, consultants, freelancers, and small business owners.
1099-only income loans

If most of your income comes from 1099s — real estate agents, sales reps, gig economy professionals — we can qualify off the 1099 totals directly, no Schedule C reduction. The cleanest program if you've got a couple solid years of 1099 income and want to skip the bank-statement analysis.
P&L only / CPA-prepared P&L

For established businesses where bank statements get messy (transfers, owner draws, intermingled accounts), some programs accept a year-to-date P&L prepared and signed by your CPA. Faster to underwrite than 24 months of statements when the business is clearly profitable.
Asset depletion loans

If you have $500k+ in liquid assets — investment accounts, retirement, cash — some lenders will treat that balance divided by the loan term (180 or 360 months) as qualifying monthly income. Common for retirees, equity-rich tech workers post-IPO, and high-net-worth borrowers between deals.

The Decision

Which program
matches your file?

If you're a
sole proprietor or
freelancer

Start with bank-statement loans.

Your business cash flow is the cleanest signal of what you can afford. 12 or 24 months of personal or business statements, an expense ratio applied, and that's your qualifying income. No re-mapping of Schedule C deductions.

If most of your
income is 1099

Use a 1099-only program.

Real estate agents, sales reps, gig professionals with clear 1099 trails — your income calc is straight off the 1099 totals, not a derived bank-statement number. Cleanest path if 1099 income is dominant.

If your business
is established and
profitable

Consider a P&L-only loan.

Bank statements get noisy for established businesses — owner draws, transfers, mixed accounts. A CPA-prepared P&L bypasses the cleanup work and is often faster to close. Best when the business is clearly cash-flow positive on paper.

If you have
substantial liquid
assets

Asset depletion may be cleanest.

$500k+ in liquid assets opens up programs where the balance divided by the loan term becomes your qualifying income. No income documentation at all. Common for retirees, post-IPO tech workers, and HNW borrowers between deals.

Frequently Asked

Self-employed questions
we hear every week.

Why do my tax returns hurt me when I'm self-employed?

Schedule C lets you write off business expenses against gross revenue. Smart tax strategy — terrible mortgage strategy. The AGI a traditional underwriter uses to qualify you is what's left after the write-offs, not what you actually take home. Bank-statement, P&L-only, and 1099 loans qualify you on the cash side instead.

How long do I need to have been self-employed to qualify?

Most non-QM self-employed programs require a 2-year track record in the same business. A few will accept 1 year if the prior W2 history was in the same field. We can usually find a path even for 1-year-old businesses with the right asset mix or co-borrower structure.

Is the rate higher on a bank-statement loan?

Yes — typically 0.5 to 1.5 points higher than conventional. The trade-off is qualifying on actual deposits instead of AGI. For borrowers who get declined elsewhere, the rate pickup is the cost of being able to buy. We'll always quote a conventional option first if it's viable.

What documents do I need for a bank-statement loan?

12 or 24 months of personal or business bank statements (your choice), a business license or CPA letter confirming the business is real, and standard credit + asset documentation. No tax returns. No K-1s. No P&L unless the program is specifically P&L-only.

What's asset depletion and when does it apply?

If you have substantial liquid assets — typically $500k+ — some lenders will divide that balance by the loan term (usually 180 or 360 months) and treat it as monthly qualifying income. Common for retirees, equity-rich tech workers, and high-net-worth borrowers between deals.

Built for self-employed borrowers

The first call
tells you which program.

Twenty minutes on the phone is enough to figure out whether bank-statement, 1099-only, P&L-only, or asset depletion is the right match. We'll outline the documentation you'd need and what the rate looks like before you commit to anything.

Book My Strategy Call

Free 30-minute strategy call. No hard credit pull on the initial call. No obligation. Just the math.

Your tax returns don't tell the real story.We have programs that do.

Tax returns are notincome statements.

Four waysto qualify.

Bank-statement loans (12 or 24 months)

1099-only income loans

P&L only / CPA-prepared P&L

Asset depletion loans

Which programmatches your file?

Start with bank-statement loans.

Use a 1099-only program.

Consider a P&L-only loan.

Asset depletion may be cleanest.

How much can you afford?Run your numbers in 30 seconds.

Self-employed questionswe hear every week.

The first calltells you which program.

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