1099 Mortgage Loan FAQs

Get all the answers you need for self-employed borrowers to understand NASB’s 1099 Mortgage Loan options.




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1099 Mortgage Loan FAQs

North American Savings Bank (NASB) specializes in 1099 mortgage loans for self-employed borrowers and independent contractors nationwide. Below, you’ll find answers to the most common questions about how NASB’s 1099 Mortgage Loan works, including income verification, documentation requirements, credit score, down payment, and eligibility guidelines. These FAQs reflect NASB’s current program standards and underwriting approach, helping you understand your options before you apply.

Program Basics

At NASB, a 1099 mortgage loan lets you qualify using your 1099-NEC earnings statements instead of traditional tax returns or W-2s. Generally, 1099 loans are designed for independent contractors, freelancers, and self-employed borrowers with non-W-2 income.At NASB, a 1099 mortgage loan lets you qualify using your 1099-NEC earnings statements instead of traditional tax returns or W-2s. Generally, 1099 loans are designed for independent contractors, freelancers, and self-employed borrowers with non-W-2 income.
NASB’s 1099 loan is best suited for self-employed borrowers—contractors, freelancers, gig workers, realtors—whose tax returns don’t reflect their actual income. Typically, these programs help borrowers with legitimate write-offs qualify based on documented 1099 earnings.
NASB’s 1099 Mortgage Loan is a non-QM program that uses alternative documentation to verify income and ability to repay. Broadly, 1099 loans are non-QM because they don’t meet agency full-doc standards.
NASB reviews the last 12 months of 1099-NEC income (plus YTD) to determine qualifying earnings for our 1099 loan. In general, lenders evaluate consistent 1099 income and may consider business tenure, DTI, and reserves when making approval decisions.
NASB’s 1099 loan qualifies income using 1099-NEC forms, whereas our Bank Statement Loan uses 12–24 months of deposits and applies an expense factor. Typically, 1099 loans rely on earnings statements, while bank statement loans rely on cash flow from deposits.


Eligibilty and Documentation

NASB typically requires the last 12 months of 1099-NEC and year-to-date income documentation for 1099 qualification. Lenders also review credit history, recent bank statements, and business activity to confirm stability.
NASB’s 1099 loan verifies income using 1099-NEC statements rather than full tax returns. Across the market, non-QM programs use alternative documentation to assess the ability to repay.
NASB may allow qualification with 12 months of 1099-NEC (particularly with the same employer), subject to overall file strength. Lenders generally prefer two-year histories, but one-year exceptions can apply in the same line of work.
NASB allows a W-2 co-borrower to strengthen the application alongside 1099 documentation. Broadly, adding a W-2 earner can help meet credit, income, or DTI thresholds.
NASB can review joint accounts if the deposits clearly reflect the borrower’s income and ownership is documented. Generally, lenders need clarity on which deposits belong to the qualifying borrower.
NASB may request invoices or contracts to document large or irregular 1099 payments. Typically, lenders exclude non-business transfers from qualifying income and verify business-related receipts.


Credit, Down Payment and Rates

NASB generally requires a minimum credit score of 700 for its 1099 Mortgage Loan. Across non-QM programs, higher scores typically lead to better pricing and terms.
NASB typically requires at least 20% down for 1099 loans, with program-matrix flexibility in select scenarios. In the market, non-QM down payments usually range from 10% to 30%, depending on risk layers and property type.
NASB’s 1099 loan rates are typically higher than those of standard conventional mortgages but remain competitive in the non-QM market. Generally, alternative documentation programs price for risk and complexity, so rates tend to be higher than those of agency loans.
NASB sets reserves based on credit, occupancy, and loan amount; your loan officer will outline the specifics. Across the industry, non-QM programs often require 3–6 months of reserves (or more), depending on risk layers.
NASB requires a minimum loan amount of $175,000 for 1099 loans (with KC-metro exceptions); maximums vary by program and eligibility. Generally, non-QM loan limits vary by lender and product.


Using a 1099 Mortgage Loan

NASB offers 1099 loans for both home purchases and refinances, subject to program guidelines. Typically, non-QM programs support purchase, rate-and-term refinances, and (with sufficient equity) cash-out.
NASB offers both rate-and-term and cash-out refinancing options for qualified 1099 borrowers. Broadly, cash-out availability depends on LTV, equity, credit, and overall risk.
NASB’s timeline is comparable to standard mortgages—typically around 30 days, depending on file complexity and document turnaround. Generally, organized documentation helps streamline non-QM underwriting.
Availability of NASB’s 1099 program varies by property type and location; your loan officer will confirm eligibility for a primary, second home, or investment property. Across the market, non-QM programs often allow multiple occupancies with different LTVs and pricing.


Income Patterns and Qualification

NASB reviews your 1099 history and year-to-date income to assess overall stability. Generally, lenders look for consistent annual earnings—even if monthly income varies—sometimes considering longer histories to smooth seasonality.
NASB focuses on documented 1099 earnings for the 1099 loan, but high write-offs on tax returns can reduce qualifying income for traditional loans. In general, deductions lower taxable income—and can limit conventional approval—making non-QM alternatives available.
NASB can review multiple 1099 sources when they are well-documented and verifiable for the required period. Typically, lenders accept multiple payers if the documentation clearly shows consistent earnings.
NASB may consider one-year exceptions when you’re in the same line of work, subject to overall file strength. Generally, many lenders prefer two-year histories but may accept one year with prior related W-2 employment.


NASB Program Details and Availability

NASB underwrites, processes, and closes your loan in-house; we do not broker your 1099 loan. In-house teams generally help maintain speed and consistency from application through closing.
NASB’s 1099 loan is not available in New York State, the Chicago or Baltimore metropolitan areas, and is not offered in all locations or for all property types. Market availability, licensing, and portfolio guidelines may limit the program's reach—confirm your ZIP code with a loan officer.
NASB typically prefers two years of self-employment/1099 history, with a possible one-year exception in the same field. Most lenders want two years of stable self-employment; exceptions vary by program.


Additional FAQs

NASB offers competitive terms; your loan officer can present available fixed-rate or ARM options for our 1099 program. In the market, non-QM programs may offer both fixed-rate and ARM structures, depending on the lender and risk mix.
NASB’s program terms depend on credit, LTV, and risk layers—ask your loan officer about the current availability of interest-only. Broadly, some non-QM lenders offer I/O features with tighter LTV and credit requirements.
NASB serves gig economy workers and independent contractors who receive 1099-NEC compensation. Generally, lenders accept platform income if it’s documented for at least 12 months and appears stable.
NASB evaluates overall file strength; your loan officer can advise whether non-QM options may be viable following a past credit event. Across the market, non-QM programs sometimes allow shorter seasoning for certain events than agency loans.
NASB considers reserves favorably when assessing overall risk and ability to repay. Generally, higher reserves can offset other risk layers in non-QM underwriting.
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*1099 loans require a minimum 700 FICO score, a minimum loan amount of $175,000 (exceptions include mortgage products for properties located within the Greater Kansas City metro and surrounding areas), and a 20% down payment. A lower FICO score or down payment may be available with eligible compensating factors. Must have a two-year history in the same line of work. Contact a NASB Loan Officer for details on the excluded areas and/or zip codes. The product is not available in New York, the Chicago or Baltimore metropolitan areas and not in all locations or for all property types. Loans are subject to underwriting, eligibility criteria, and other factors. Your Loan Officer will provide more information regarding 1099 loans and what may work best for your situation.