By Matt Allen
Vice President, Portfolio Lending (NMLS #415037)

How to Get a Home Loan as a Gig Worker

Oct 27, 2022

  • Mortgages
  • Non-QM Loans
  • Portfolio Loans
  • Bank Statement Loan
  • Non-conforming Loans

No single event in recent memory has changed the job market more than the COVID-19 pandemic. One of the most significant changes was the explosive growth of the gig economy. According to Forbes, the gig workforce grew 30% during the pandemic and is on track to surpass the full-time workforce by 2027. A gig worker can be anything from a freelance writer, or a musician, to an Uber driver. Because gig workers are essentially independent workers and are paid as contractors or freelancers, getting a home loan can be difficult, as you need to supply pay stubs or income tax returns as proof of income for a conventional loan. However, there are ways you may be able to secure a mortgage loan if you’re a gig worker. Here are two of them.

Bank Statement Loan - With bank statement loans, a lender looks at the bank statements of a gig worker to determine their income instead of standard documentation. Lenders look at the borrower's bank statements over a 12- to 24-month period to determine the borrower's net income, which is the amount of money earned after the borrower has paid taxes and business-related expenses. While bank statement loans usually require a higher down payment and the borrower will need a good credit score and loan-to-value ratio, this is a good choice for a home loan for the gig worker.

1099 Loan - A 1099 loan allows the gig worker to use their 1099 earning statements to show income to qualify for a loan. Borrowers need to show the last six months of 1099 income, have documentation of year-to-date income, have a 680 minimum credit score, and put at least 15% down with mortgage insurance approval.  Lenders will also want to see a contract in place to verify that their contractual work will continue, and not just be a one-time project for income. 

A gig worker needs to do many of the same things to help secure a mortgage loan that a salaried employee needs to do, including making sure your credit score is as good as it can be, shopping around to make sure you get the best loan with the best rate, save as much money as you can for a down payment, and reduce your debts as much as possible for a good debt-to-income ratio.

To find out if you qualify for a bank statement loan or 1099 mortgage loan, reach out to the experts at NASB at 855-921-4921.