New York runs on independent contractors. Consultants, nurses and therapists working through agencies, real estate agents, IT contractors, rideshare and taxi drivers, production crews and freelance creatives often get paid on a 1099 instead of a W-2. That's a normal way to earn a living, but lenders treat it as self-employment.
Whether getting a mortgage with 1099 income is harder depends mostly on your deductions. Here's how lenders calculate 1099 income and what your options are.
Is it harder to get a loan with a 1099?
Getting a mortgage when you're self-employed mostly means more paperwork and a closer look at how your income is calculated. The 1099 itself isn't the problem.
It gets harder when your Schedule C deductions shrink your net profit. A conventional lender qualifies you on that net figure, so a contractor with steady gross pay and heavy write-offs can look like a much smaller earner on paper.
If your returns already show solid net income over two years, a conventional loan may work fine. If they don't, a 1099-specific program or a bank statement program may be worth reviewing.
How do mortgage lenders calculate 1099 income?
There are two broad approaches, and they can produce very different numbers.
| Approach | Starting point | What gets subtracted |
|---|---|---|
| Conventional | Schedule C net profit on your tax returns | Your actual deductions, with some non-cash items like depreciation sometimes added back |
| Non-QM 1099 program | Gross earnings shown on your 1099 forms | A set expense factor chosen by the program, not your actual deductions |
Conventional lenders generally average two years of income. If your income is dropping, they may use the lower year.
Example: a Bronx travel nurse paid on 1099s
A nurse in the Bronx works agency contracts at several area hospitals and receives 1099s from two agencies. After deducting licensing, scrubs, car costs and a home office, her Schedule C shows less than she actually takes home. A conventional lender averages two years of that net figure. A 1099 program would start from the gross amounts on the 1099 forms and subtract a fixed expense factor, which may produce a higher qualifying income. Which path works better depends on her actual numbers and the program's rules.
1099 mortgage requirements: income, credit and down payment
Every program sets its own 1099 home loan requirements, but the questions are consistent.
How much income you need for a given loan, such as a $200,000 or $250,000 mortgage, has no single answer. It depends on the rate, property taxes, insurance, any co-op or condo charges, your other debts and the program's debt-to-income limit. What changes for contractors is which income gets counted: Schedule C net, or gross 1099 earnings less an expense factor.
- History: commonly one or two years of 1099s, ideally from the same payers or in the same line of work.
- Credit: minimum scores vary by program. Recent late payments or other credit problems narrow your options, though requirements differ enough that a review can still be worthwhile.
- Down payment and reserves: usually larger on non-QM 1099 programs than on conventional loans.
- Debt-to-income: your monthly debts compared with the income the program counts.
- Refinances: whether a 1099 program allows a refinance or cash-out depends on the lender.
If your 1099 pay lands in your bank account, the bank statement calculator can show how a lender might count those deposits.
What documents does a 1099 loan need?
Requirements vary by program, but a 1099 file usually includes:
- 1099 forms for the most recent one or two years.
- Year-to-date proof of earnings, such as recent payment statements or bank statements showing deposits.
- Evidence you're still working with the same payers, or in the same line of work.
- Asset statements for your down payment, closing costs and reserves.
- Photo ID and authorization for a credit review.
Who is a 1099 loan a good fit for?
A 1099 program tends to fit contractors with a small number of steady payers and real deductions. Common examples in New York include:
- Agency nurses, travel nurses and independent therapists.
- Real estate agents and loan officers paid on commission through a brokerage 1099.
- IT, finance and marketing consultants working on contract.
- Rideshare, delivery and taxi drivers whose platform issues 1099s.
- Film, TV and theater crew working project to project.
If your income comes from many small clients without 1099s, a bank statement loan may document it better.
What if I just switched from W-2 to 1099?
This is common, especially when an employer reclassifies a role or you go independent with the same clients. Conventional guidelines generally want two years of self-employment, though Fannie Mae allows less if your most recent returns show a full 12 months of self-employment and other conditions are met.
Some non-QM programs also allow one year if you have prior experience in the same line of work. A nurse who moved from a hospital W-2 to agency 1099 work, doing the same job, is a different story to an underwriter than someone who started a new career.
What are the tradeoffs?
Non-QM 1099 loans typically carry higher rates than conventional loans, and down payment and reserve requirements are usually larger. They are still full underwriting: the lender has to make a good-faith determination that you can repay.
In New York, price adds pressure. The 2026 one-unit conforming limit is $1,249,125 in the five boroughs, Nassau and Westchester. Above that, you're in jumbo territory, where documentation rules usually tighten further.
What are the mortgage tax rates in New York City?
New York City charges a mortgage recording tax when you finance a home. On 1–3 family homes and condo units, the buyer's share runs about 1.8% on loans under $500,000 and about 1.925% at $500,000 and up. Co-op loans are not subject to it, because a co-op loan is secured by shares and a proprietary lease rather than real property. Westchester's rate is 1.3%.
New York State also charges a 1% mansion tax on purchases of $1 million or more, and NYC adds a supplemental tax at $2 million and up.
On a New York refinance, a CEMA can limit the recording tax to the new money only.
Common questions
Is it hard to buy a house with 1099 income?
Not inherently. The challenge is that deductions reduce the Schedule C net income conventional lenders use. If your returns show enough income, a standard loan may work. If not, 1099 programs that start from gross earnings may be an option, depending on the lender.
What is a 1099 home loan?
A 1099 home loan is a mortgage, usually non-QM, that calculates income from the 1099 forms your clients or platforms issue rather than the net profit on your tax return. The program typically takes your gross 1099 earnings over one or two years and subtracts a set expense factor. It's meant for independent contractors whose deductions make their returns understate what they earn. Requirements vary by lender.
What is a 1099 form for a mortgage?
It can mean two things. When you apply, the 1099 forms from your clients or platforms document your contractor income. Once you have a mortgage, the year-end statement your lender sends showing the interest you paid is Form 1098, the Mortgage Interest Statement, which is a different form. Your CPA uses the 1098 at tax time, and it has nothing to do with qualifying.
How do mortgage lenders calculate 1099 income?
Conventional lenders use your Schedule C net profit from tax returns, typically averaged over two years, with some non-cash items added back. Non-QM 1099 programs use gross 1099 earnings and subtract a set expense factor instead of your actual deductions.
How many years of 1099s do I need?
Non-QM 1099 programs commonly ask for one or two years of 1099s. Conventional loans generally want two years of self-employment history, though there are exceptions for those with a full 12 months on their most recent returns.
Can rideshare or delivery drivers get a mortgage?
They may qualify. Platform drivers are usually paid on 1099s and treated as self-employed. Mileage deductions often cut net income sharply, so a 1099 or bank statement program may show income more fully than a tax return.
Do I need tax returns for a 1099 loan?
Many non-QM 1099 programs use the 1099 forms rather than full tax returns to calculate income. Requirements vary, and some may request transcripts. Conventional loans will require returns.
Can I have both W-2 and 1099 income?
Yes. Many New Yorkers have a salaried job plus side contract work. W-2 income is documented normally, and 1099 income is treated as self-employment. Whether the 1099 portion counts depends on how long you've earned it and how it's documented.
Can I use a 1099 loan to buy a co-op?
It's harder. Many non-QM lenders do not lend on co-ops, and boards typically want tax returns and a CPA letter from self-employed buyers. Condos and one-to-four-family homes usually have more financing options.
Do lenders count 1099 income from multiple payers?
Generally, yes. Many contractors have several payers each year, and programs can add up 1099s from all of them. Lenders look for consistency, so a steady set of clients over one or two years tends to read better than income that jumps from payer to payer.