1099 & P&L
Mortgage Loans
A different way to document the income you earn.
Independent contractor or business owner? Select mortgage programs may use your 1099 earnings or a professionally prepared profit-and-loss statement instead of tax returns to evaluate qualifying income.
Explore My 1099 / P&L OptionsIncome is still verified. Documentation and eligibility depend on the program and your financial profile.
Self-employed doesn’t mean you need a specialty loan.
Conventional financing may still work for contractors and business owners. That path generally evaluates tax returns and supporting records, subject to applicable documentation exceptions. Alternative-documentation programs are worth comparing when a traditional income review does not fit your situation.
1099 and P&L options generally fall within Non-QM lending. They offer a different income-documentation method, with their own underwriting requirements and costs.
Which documents best reflect your business?
| What to compare | 1099 income loan | P&L mortgage loan |
|---|---|---|
| Main income record | 1099 forms showing contractor earnings, often covering one or two years. | A profit-and-loss statement covering the required period, commonly one or two years. |
| Expense treatment | The lender may deduct an expense allowance or use supported business expenses. | The lender reviews revenue, expenses and resulting business income, with applicable adjustments. |
| Supporting records | Current earnings documentation, bank statements and business-history verification may be required. | Bank statements, business-history verification and preparer credentials may be required. |
| Important detail | Some programs restrict the number of income sources or require forms in your personal name. | Many programs require preparation by an acceptable independent CPA or tax preparer. |
These are general program patterns, not a universal checklist. Available options vary by lender, property, state and borrower profile.
Revenue and qualifying income are different.
A lender evaluates sustainable income available to support the mortgage. Gross 1099 earnings or business revenue may be reduced for expenses, ownership share and other program adjustments.
For P&L financing, the starting point is generally business income after expenses—not every dollar of sales. Income trends and supporting records also matter.
$120,000 annual earnings
− $24,000 assumed business expenses
= $96,000 income after expenses
Example only. The 20% expense assumption is not a program rule. A lender may use a different expense factor, averaging period or additional adjustments. This is not an approval or loan-amount estimate.
Bring the records.
We’ll help compare the paths.
- Available 1099s or an existing prepared P&L
- Recent income or business bank statements
- Your business history and ownership details
- Your purchase or refinance goal
Confirm the lender’s requirements before paying to prepare a new P&L.
What else will the lender review?
Credit history, debts, down payment or equity, reserves, property eligibility and income stability still matter. Purchase and refinance options may be available, including cash-out where permitted.
Rates, fees and required down payments can differ from conventional financing. Compare the total cost and available loan terms—not just the documentation.
No single credit score, down payment or loan limit applies to every 1099 or P&L program.
1099 & P&L mortgage questions
Can I qualify without submitting tax returns?
Select alternative-documentation programs allow 1099s or an acceptable P&L in place of tax returns for income qualification. Other income, asset and business records may still be required. FHL can help identify the documentation for an available option.
Can I prepare my own profit-and-loss statement?
Many P&L mortgage programs require an independent CPA or acceptable tax preparer. A statement you prepare yourself may not meet the requirements. Confirm the required preparer and format before arranging a new statement.
What if I receive 1099s from several clients?
Acceptance varies. Some 1099 programs restrict income to a single source. If you have several clients, another 1099 program, a P&L option or bank-statement financing may be worth comparing.
Are bank statements still required?
They may be. Some programs use recent statements to support current earnings or confirm P&L revenue; others have different requirements. These loans should not be treated as no-documentation financing.
How is this different from a bank-statement loan?
A 1099 loan uses contractor earnings records. A P&L loan uses a prepared business financial statement. A bank-statement loan evaluates eligible deposits over the program’s required period, with expense adjustments where applicable. The most suitable path depends on your records and overall profile.
Let’s find the right way to document your income.
Compare conventional, 1099, P&L and bank-statement options with Future Home Loans.
Explore My Loan OptionsAll loans are subject to underwriting and approval. Programs, documentation, rates and terms vary and may change. Availability depends on state licensing, property eligibility and lender guidelines.