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in Truckee, CA
Self-employed borrowers in Truckee face a choice between two main non-QM paths. Both skip W-2 verification, but they prove income differently.
Your income structure determines which option works better. Most of my Truckee clients qualify for one but not both.
These aren't boutique programs anymore. They're mainstream tools for anyone earning outside traditional payroll—from Tahoe rental operators to remote consultants.
1099 loans use your IRS 1099 forms to prove income. Lenders average your reported earnings over 12 to 24 months.
You need clean 1099 documentation with minimal write-offs. If you expense heavily to reduce taxes, your qualifying income drops.
Most lenders want 10-20% down and credit scores above 620. Rates run 1-2% higher than conventional loans.
This works well if your 1099s show consistent income and you don't bury earnings in business deductions. Rate varies by borrower profile and market conditions.
Bank statement loans analyze 12 to 24 months of deposits. Lenders calculate income from total deposits minus obvious transfers or refunds.
This option captures income before you write it off. If you expense aggressively, bank statements show higher qualifying income than tax returns.
Expect 10-20% down and similar credit requirements. Rates match or slightly exceed 1099 loan pricing.
Truckee borrowers with rental income, cash flow businesses, or multiple revenue streams often qualify for more with this route. Rates vary by borrower profile and market conditions.
The core difference is what counts as income. 1099 loans use your taxable income. Bank statement loans use gross deposits.
If you write off more than 25% of earnings, bank statements usually qualify you for more. If you report most income, 1099s are cleaner.
Documentation differs too. 1099 loans need tax returns and forms. Bank statement loans just need statements—no CPA letters or P&Ls required.
Pricing is close. Bank statement loans sometimes add 0.25-0.5% in rate because lenders see deposit analysis as higher risk.
Choose 1099 loans if your forms reflect your actual earnings and you file complete returns. This path is faster and slightly cheaper.
Choose bank statement loans if you maximize deductions or have income that doesn't show on 1099s. Think rental deposits, cash payments, or multiple LLCs.
Truckee's mix of vacation rental owners and remote professionals often lean toward bank statements. Tax strategy drives loan strategy here.
I run both scenarios for most self-employed clients. The right answer depends on how you structure your business for taxes.
Yes, but one usually qualifies you for a higher amount. I compare both options to find which gives you better buying power based on your tax situation.
1099 loans require two years of returns. Bank statement loans skip returns entirely and just use 12-24 months of statements.
1099 loans typically close faster if your returns are ready. Bank statement loans take longer because underwriters analyze every deposit manually.
Most lenders accept business statements for bank statement loans. Some even blend personal and business deposits to maximize qualifying income.
Usually bank statements. Rental income hits your account before expenses, so deposits show higher income than Schedule E reports on tax returns.