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South Pasadena attracts creative professionals, consultants, and tech contractors who don't fit traditional mortgage boxes. Standard lenders reject 1099 earners even when they clear six figures annually.
Non-QM lenders built 1099 loans specifically for independent contractors who show strong income but lack W-2 documentation. Your tax returns tell a different story than your actual cash flow.
1099 Loans in South Pasadena
You need 12-24 months of consistent 1099 income from the same industry or client base. Lenders calculate your qualifying income by averaging your 1099 gross receipts, not your taxable income after deductions.
Credit scores start at 620 for most programs, though better rates kick in at 680. Expect 10-20% down depending on property type and your overall profile strength.
Local decision guide
Use this guide to connect 1099 loans eligibility, lender expectations, and local market factors before comparing payment options in South Pasadena.
South Pasadena attracts creative professionals, consultants, and tech contractors who don't fit traditional mortgage boxes. Standard lenders reject 1099 earners even when they clear six figures annually.
Non-QM lenders built 1099 loans specifically for independent contractors who show strong income but lack W-2 documentation. Your tax returns tell a different story than your actual cash flow.
You need 12-24 months of consistent 1099 income from the same industry or client base. Lenders calculate your qualifying income by averaging your 1099 gross receipts, not your taxable income after deductions.
Only non-QM lenders offer true 1099 programs. Traditional banks require two years of tax returns showing averaged income, which kills your approval if you write off business expenses aggressively.
We access 15+ non-QM lenders who specialize in contractor income. Each has different calculation methods—some count 100% of 1099 income, others apply expense ratios by industry type.
Most 1099 borrowers should skip these loans if they have strong tax returns showing steady income. Conventional loans beat non-QM rates by 1-2% when your returns support approval.
Where 1099 loans shine: you're a high earner writing off $80K in business expenses, or you switched to contract work in the last 18 months. These scenarios kill conventional approvals but work perfectly for non-QM underwriting.
Bank statement loans offer an alternative if you mix 1099 and other income sources. They analyze 12-24 months of deposits rather than specific 1099 forms, giving you more flexibility in documentation.
Profit and loss loans work when you have an accountant-prepared P&L but your 1099s don't capture full income picture. Asset depletion makes sense if you're asset-rich but show minimal annual 1099 income.
South Pasadena's Craftsman homes and historic properties often need renovation. Some 1099 programs allow limited rehab financing, but most require purchase-only until you close and refinance.
Los Angeles County's property values push many purchases into jumbo territory. Non-QM jumbo 1099 loans exist but require 20-25% down and 700+ credit for competitive pricing.
No lender approves 1099 loans with less than 12 months documentation. You need at least one full year of consistent contract income to establish a qualifying pattern.
Most lenders count 100% of gross 1099 receipts, though some apply industry expense ratios. This approach benefits borrowers who write off significant business expenses on tax returns.
Lenders average your income over 12-24 months. Seasonal fluctuations are fine as long as the overall trend shows stability and you're not in a declining income pattern.
Yes, though expect 20-25% down and higher rates. Lenders view 1099 borrowers buying investment properties as higher risk than W-2 earners with the same income.
Rates run 1-2% higher than conventional programs. You're paying for flexibility in income documentation that traditional lenders won't accept.