Self-Employed & 1099 Borrowers

Single-Family Homes, Condos, and 2–4 Unit Multi-Family

Non-QM Mortgage Solutions for Self-Employed Borrowers

 

Many self-employed borrowers, 1099 freelancers, and business owners take advantage of legitimate tax deductions to reduce their taxable income. As a result, the net income shown on their tax returns may be significantly lower than their actual cash flow.

 

Because of this, qualifying for a traditional QM (Qualified Mortgage) loan can sometimes be difficult due to insufficient reported income.

 

Non-QM (Non-Qualified Mortgage) programs offer more flexible income qualification methods, making it possible for self-employed borrowers and freelancers to purchase a home or refinance an existing mortgage. Instead of relying solely on tax returns, income may be verified using:

 

  • Business Bank Statements
  • Profit & Loss (P&L) Statements
  • 1099 Forms
  • Asset Documentation
  • Other Alternative Income Verification Methods

These programs can be an excellent solution for borrowers who may not qualify under traditional mortgage guidelines.

Minimum down payment requirements typically start at 10%.

🔶 Loan Factory

Access to 150+ Non-QM lenders
One of America's Top Mortgage Brokerages

🔶 Pre-Approval

Compare rates, fees, and loan options from multiple lenders offering the same program

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🔶 Free Consultation

Terry Kwon
Loan Officer
(631) 624-4480

Two Ways to Qualify Income

1. Bank Statement Program

 

This program uses bank statements instead of tax returns to calculate qualifying income.

 

 

Personal Bank Statements
  • Most recent 12 or 24 months of personal bank statements
  • Income is calculated based on eligible deposits

 

 

Business Bank Statements
  • Most recent 12 or 24 months of business bank statements
  • Net income is calculated using an Expense Ratio based on the borrower’s industry

 

 

Expense Ratio
  • Typically 50%
  • May range from 10% to 50% depending on the industry
  • A CPA Letter may be required if the Expense Ratio is below 50%

 

Example
  • Average Monthly Deposits: $25,000
  • Expense Ratio: 50%
  • Qualifying Monthly Income: $12,500

 

✅ May provide higher qualifying income
✅ One of the most popular programs for self-employed borrowers

 

2. Profit & Loss (P&L) Program

 

 

This program allows borrowers to verify income using a Profit & Loss Statement prepared by a CPA or tax professional.

 

 

Features
  • Income calculated based on the P&L Statement
  • Underwritten using actual business net income
  • CPA-prepared P&L accepted
  • Some programs may require bank statements for additional verification

 

 

Required Documents
  • Current Profit & Loss Statement (P&L)
  • Business registration documents
  • Bank statements

 

 

✅ No tax returns required
✅ Can reflect recent business growth
✅ May provide higher qualifying income

 

Recommended For

 

 

✅ Self-Employed Borrowers

✅ 1099 Independent Contractors & Freelancers

✅ Real Estate Agents

✅ Insurance Agents

✅ Consultants

✅ Trucking & Transportation Professionals

✅ Business Owners Whose Tax Return Income Is Lower Than Their Actual Income

 

Eligible Property Types

 

  • Single-Family Homes
  • Condominiums (Condos)
  • 2–4 Unit Multi-Family Properties

🏠 Primary Residence

🏡 Second Home

🏢 Investment Property

 

✅ Home Purchase Loans

✅ Refinance Loans

✅ Home Equity Loans & HELOCs

 

Milestone Point Inc. In partnership with Loan Factory Inc. (NMLS #320841)
Licensed Mortgage Loan Officer: Terry Kwon (NMLS #2620208)

Residential Mortgage Licensed: AL, CA, CO, GA, IL, ME, NJ, NV, OH, TX, VA, WA

Contact: (631) 624-4480
Email: terry@milestonepointinc.com
Milestone Point, Inc: 200 Garden City Plaza, Suite 215, Garden City, NY 11530

Loan Factory: 2195 Tully Road. San Jose, CA 95122

 

Disclaimer:
Loan approval is not guaranteed. Approval is subject to credit, income, assets, and other underwriting criteria.
Rates and terms are subject to change without notice.
Milestone Point Inc. partners with Loan Factory Inc. to provide access to multiple mortgage products.
All mortgage programs are offered through licensed mortgage brokers/loan officers registered with the NMLS.