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Santa Monica's economy runs on freelancers, consultants, and entrepreneurs. Traditional W-2 documentation won't capture what you actually earn.
Most conventional lenders reject 1099 borrowers outright. They want tax returns showing maximum deductions, which kills your qualifying income.
1099 loans solve this by using your gross 1099 income before business write-offs. You qualify based on what you actually make, not what you report to the IRS.
You need 12-24 months of 1099 forms from consistent clients. Lenders average your gross income across that period to set your qualifying number.
Credit scores start at 620, but 680+ gets better rates. Down payments run 10-20% depending on loan amount and property type.
Most lenders want at least two years of self-employment history. Switching from W-2 to 1099 recently creates complications even if income is strong.
You won't find this product at Chase or Wells Fargo. Non-QM lenders handle 1099 loans, and they price deals differently based on your documentation strength.
Rates run 1-2% above conventional loans. That spread narrows with larger down payments and higher credit scores.
Brokers access 30-40 non-QM lenders who compete on these deals. Direct lending means you get one underwriter's interpretation of your 1099 income.
The lenders who approve you fastest are the ones who see consistent 1099 income from 3-5 clients. Single-client 1099 workers get more scrutiny because it looks like W-2 employment.
Santa Monica tech contractors and entertainment industry freelancers do well with these loans. Your income pattern matters more than your job title.
Don't clean up your 1099 situation right before applying. Lenders want to see the same income pattern for 12-24 months. Sudden changes trigger underwriting questions.
Bank statement loans work if your 1099 income is inconsistent or if you mix 1099 and business income. You'll pay slightly higher rates but get more underwriting flexibility.
Profit and loss loans let you write your own income calculation. They require a CPA signature and cost more than 1099 loans.
1099 loans are the cleanest documentation path for pure contractors. If that describes you, this loan type will cost less than alternatives.
Santa Monica pricing pushes many deals into jumbo territory above $832,750. Jumbo 1099 loans exist but require 15-20% down and 700+ credit scores.
Condos near the beach need full reserves and HOA financial review. These properties already face stricter conventional guidelines, and non-QM lenders add their own overlays.
The city's rent control laws don't affect owner-occupied purchases, but lenders notice investment property trends. Pure 1099 income on a rental purchase gets harder to approve.
Yes, but expect extra scrutiny. Lenders worry single-client 1099 workers are actually employees and want letters confirming contractor status.
Lenders average 12-24 months of income. Seasonal variation is fine as long as the pattern is consistent year over year.
Most 1099 loan programs skip tax returns entirely. Some lenders want them for credit review but won't use them to calculate income.
Loan amounts follow your gross 1099 income averaged over 12-24 months. Most programs cap at $3-4 million with 20% down and strong credit.
You need 12 months minimum. Some lenders accept 12-month history if you worked the same field as a W-2 employee before going independent.
1099 Loans in Santa Monica