Can a 1099 Contractor Get a Mortgage in Texas?
The short answer
Yes. Lots of 1099 contractors buy homes in Texas. Traditional loans usually look at your tax returns and use your income after business expenses, typically averaged over two years. If your write-offs make your income look smaller than it really is, there are also programs that qualify you using your 1099s or bank statements instead.
Path 1: traditional loans (conventional, FHA, VA)
Lenders usually want about two years of history in the same line of work.
They use the net income on your tax returns, not your gross 1099 totals.
Some non-cash expenses, like depreciation, can often be added back.
If you recently moved from W-2 to 1099 in the same field, some lenders can work with a shorter history. Ask before you assume you have to wait.
Path 2: 1099-based programs
Some lenders offer programs that use your 1099 forms instead of your full tax returns, usually applying a set expense factor to estimate income. These are non-QM loans: they often need a larger down payment and can cost more than conventional financing. For contractors with big write-offs, they can still be the difference between yes and not yet.
Path 3: bank statement loans
Another non-QM option that uses 12 or 24 months of deposits to estimate income. Great for contractors paid by many different clients.
How to get ready
Gather two years of 1099s and tax returns.
Keep business and personal accounts separate if you can.
Talk to a lender before you file this year's return, so you understand how your deductions will show up.
Frequently asked questions
Do I need a business license?
Not always, but lenders want proof you are in business, such as a license, a CPA letter or client contracts.
Are 1099 loans more expensive?
Non-QM programs often are. That is why we compare them against traditional options first.
For more, read self-employed mortgages in Texas, call (469) 414-5554, or visit our Texas branch.
By Kelly Welton, Mortgage Broker (NMLS #314183), Mohave Mortgage Texas Branch. Mohave Mortgage NMLS #1830581 · Texas Branch NMLS #2690682 · Equal Housing Opportunity. General information only, not a commitment to lend or financial advice. Programs, rates and guidelines vary and change.
