Business owners & 1099 earners
Mortgage Options for Self-Employed Borrowers in Florida
NexGen Capital Corp explains how self-employment income is reviewed so business owners, contractors and 1099 earners can prepare before applying.
Short answer
Lenders usually treat you as self-employed if you own 25% or more of a business or earn 1099 income. For conventional and other agency loans, income is typically calculated from one to two years of personal and business tax returns after deductions. Some non-agency programs document income differently, with their own requirements and pricing — what applies depends on the program and your file.
How lenders may evaluate self-employment income
Tax returns
Agency underwriting generally averages net income from personal returns (and business returns, where applicable). Deductions that lower your taxes also lower qualifying income.
Business ownership and history
Lenders look at your ownership percentage and how long the business has operated. A two-year history is common; shorter histories may be considered with related experience.
Cash flow and business stability
Underwriters review whether income is stable or increasing, and may analyze business liquidity before counting business funds.
Assets and reserves
Personal assets for down payment, closing costs and reserves must be documented. Using business funds can require additional analysis.
Documentation depends on the loan program
Conventional, FHA and VA loans follow their agency's self-employment guidelines. Non-agency programs may use alternative documentation, but terms, down payment and pricing differ, and availability changes. We review your situation before discussing which categories may fit — we do not promise any specific documentation type.
How to prepare
- Two years of personal and business tax returns, with all schedules
- Year-to-date profit and loss statement if requested
- Recent business and personal bank statements
- Business license, CPA letter or other proof of ownership and history
- Talk with your tax professional before filing if you plan to buy soon
Frequently asked questions
Can I get a mortgage with one year of self-employment?
Sometimes. Some guidelines allow a shorter history when you have prior experience in the same field, but it depends on the program and lender.
Why is my qualifying income lower than what my business earns?
Lenders generally use net income after business expenses and deductions shown on your tax returns, not gross revenue.
Are bank-statement or no-document loans available?
Alternative-documentation programs exist in the market, but availability and terms change. We will discuss what is currently available after reviewing your circumstances rather than advertise it here.
Can I use business funds for my down payment?
Often yes, with documentation showing you have access to the funds and that withdrawing them will not harm the business.
Do 1099 contractors count as self-employed?
Generally yes. Lenders typically review 1099 income similarly to other self-employment income.
Related NexGen Capital pages
Ready to review your options?
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Information provided by NexGen Capital Corp, a Florida mortgage brokerage, NMLS #1766649 (NMLS Consumer Access). Educational content only — not a commitment to lend. All loans are subject to credit approval, underwriting, property eligibility and program guidelines. Programs, rates and terms change without notice. Equal Housing Opportunity.