A 1099 mortgage program is designed for borrowers who earn income as independent contractors, freelancers, consultants, or other self-employed workers who receive 1099 income instead of W-2 wages. Rather than relying on traditional paycheck and employer verification, lenders typically use one or two years of 1099 forms, plus year-to-date income documentation, to evaluate whether the borrower has enough stable income to qualify

This type of loan is often considered a non-QM mortgage, which means it does not follow standard agency underwriting rules. It can be a useful option for borrowers whose tax returns do not fully reflect their true earnings because of business deductions, and programs allow financing for primary homes, second homes, or investment properties