Buying a Home With Less Than Two Years of 1099 Income

A 1099 is the start of the review

A 1099 form records payments, but it does not by itself establish the income available for a mortgage. Business expenses, ownership, work history, and current performance can change the qualifying amount.

Start with your filed returns, current income records, and an explanation of the business. A switch from employee to contractor in the same field deserves a different review from a completely new line of work.

Check conventional eligibility before assuming you need an alternative

Fannie Mae can consider a shorter self-employment history when the latest applicable returns reflect a full year of income from the current business and the required prior-work history is documented. Other conditions still apply.

That exception is not an automatic approval and does not mean that a partial-year return is equivalent to a full year. Ask which documentation the underwriter needs for your specific timeline.

Compare alternative documentation carefully

Bank-statement or other non-QM options may be available for some borrowers. The lender’s actual program determines how deposits, expenses, ownership, credit, and assets are evaluated. Business revenue is not automatically personal qualifying income.

Compare the complete payment, fees, cash needed, and terms with the available conventional path. Waiting for additional documented history can also be part of the comparison.

Bring the business timeline

• When you started and what work you performed before it.
• Filed personal and applicable business tax returns.
• Current profit-and-loss information and business statements.
• Ownership percentage and any significant business debts.

Sources and program details

These references support the program details discussed above. The program selected for your loan and its current requirements control your application.

• Fannie Mae: self-employed borrower requirements