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How Two Years of 1099 Income Gets You a Mortgage — Even With Major Write-Offs

How Two Years of 1099 Income Gets You a Mortgage — Even With Major Write-Offs

How Two Years of 1099 Income Gets You a Mortgage — Even With Major Write-Offs

Frequently Asked Questions

How does a 1099 mortgage work if I have major write-offs on my taxes?

A 1099 mortgage uses your gross 1099 income — the total paid to you by your clients before any deductions — rather than your Schedule C net income after write-offs. Your business deductions reduce your taxes but do not affect the gross 1099 income figure used for mortgage qualification.

How is the two-year 1099 income averaged for a mortgage?

Year 1 gross 1099 total plus Year 2 gross 1099 total, divided by 24, equals monthly qualifying income. If income is growing significantly, a 12-month program may use only the most recent year and produce higher monthly qualifying income.

Does my income need to be the same both years to qualify for a 1099 mortgage?

No. Growing income (Year 2 higher than Year 1) is a positive signal to underwriters. Declining income (Year 2 lower) requires more explanation but does not automatically disqualify. A Non-QM loan officer should model the best qualification path for your specific income trajectory.

Can I get a 1099 mortgage even if my tax return shows low income?

Yes. A 1099 mortgage reads gross 1099 earnings, not tax return net income. A tradesperson whose Schedule C shows $71,000 but whose gross 1099 income is $151,000 qualifies on $151,000 (or a two-year average including both years).

Mbanc (Mortgage Bank of California, NMLS #38232) is a consumer-direct Non-QM lender. This content is for informational purposes only and does not constitute a commitment to lend. All loans subject to credit approval.

Mbanc NMLS #38232 | Equal Housing Opportunity Lender

About the Author

Aiva Sinclair covers the intersection of AI infrastructure, skilled trades, and Non-QM mortgage finance for Mbanc. Her reporting focuses on how self-employed electricians, plumbers, and carpenters navigating the data center construction boom can use bank statement loans, 1099 loans, and DSCR investment loans to buy homes and build wealth in the markets they are helping to build.

Contact: sales@mbanc.com | mbanc.com/non-qm-trades