Loan options

Self-Employed and 1099 Mortgages in Michigan

Self-employed and 1099 borrowers in Michigan can qualify for a mortgage four ways: on tax returns, on 12 or 24 months of bank statements, on 1099s alone, or on a profit-and-loss statement signed by a tax professional. The right path is the one that shows the most of your real income at the lowest cost, and from our Grand Rapids office we price the paths side by side before you choose one.

Which path fits your income?

If this sounds like you	Start with	You qualify on
Your tax returns already show strong net income	A conventional, FHA or VA loan	Tax returns, with non-cash deductions added back
Write-offs shrink your returns, but your deposits are strong	A bank statement loan	12 or 24 months of deposits
You’re a contractor or commission earner paid on 1099s	A 1099-only mortgage	One or two years of 1099s
A CPA or enrolled agent keeps your books	A P&L-only mortgage	A 12- or 24-month prepared P&L
Your spouse or partner earns W-2 wages	Adding them as a co-borrower	Their wages, alone or blended with your income
You’re buying a rental property	A DSCR loan	The property’s rent
You have substantial savings but uneven income	An asset-based loan	Liquid savings, investments and retirement accounts
You file taxes with an ITIN instead of an SSN	An ITIN loan	ITIN accepted, SSN not required: deposits, 1099s or a P&L, on select partner programs

The self-employed problem, in one paragraph

Conventional underwriting qualifies you on the net income from your tax returns, usually averaged over two years. Every real expense your CPA writes off (supplies, fuel, subcontractors, insurance) lowers that number, so a business that grosses well can qualify like a much smaller one. Good tax strategy and good mortgage qualifying pull in opposite directions, and many self-employed borrowers only discover this when a lender declines them. Every path on this page is a different answer to that one problem.

Tax returns, and the add-backs that help

Tax returns are still the cheapest way to qualify when they work, and they often work better than borrowers expect, because underwriters add back deductions that never took money out of your account:

• Depreciation: the yearly write-off on equipment, vehicles and buildings you already paid for
• Depletion: the same idea for natural resources, such as timber or gravel
• Amortization: the write-down of costs like a purchased client list or startup expenses
• Casualty losses: a one-time loss, such as uninsured storm damage, that won’t recur

For a business that owns its trucks, machines or building, those add-backs can be the difference between a conventional approval and an alternative-documentation loan. We read your returns with them before recommending anything else. If you plan to buy in the next year or two, it’s worth asking your CPA how a filing choice will read to an underwriter before you file.

When your deposits tell the truer story

If write-offs leave your returns well below what your business really earns, a bank statement loan qualifies you on 12 or 24 months of personal or business deposits instead, with no tax returns. Down payments start at 10% with strong credit. How deposits are counted, the expense methods, and current program numbers all live on that page.

1099-only mortgages

A 1099-only mortgage qualifies independent contractors and commission earners on the 1099 forms they receive, with no tax returns. Instead of the net profit on your Schedule C, the lender starts from your gross 1099 income and subtracts an expense factor, which for a contractor with heavy write-offs can be a much larger number.

• Who it fits: independent contractors and people paid entirely on commission, such as real estate agents, sales and insurance reps, consultants and trades subcontractors. Owner-operator drivers: see our truck driver home financing guide for how their income is read
• Documents: one or two years of 1099s, an IRS transcript confirming them, and year-to-date earnings from check stubs or account statements
• Income math: your 1099 total averaged over 12 or 24 months, less a flat 10% expense factor on select programs, or less your actual expenses on a P&L prepared by a tax professional
• Staying power: year-to-date earnings should keep pace with last year’s (within 10% or higher, on select programs)
• Down payment: from 20%
• Credit score: from 660

P&L-only mortgages

A P&L-only mortgage qualifies a business owner on a profit-and-loss statement covering 12 or 24 months, prepared and signed by a CPA or an IRS enrolled agent (a few programs accept other registered preparers; a PTIN alone doesn’t qualify), with no tax returns. It fits an owner whose books a tax professional already keeps, and it reads the business the way your accountant does.

• Documents: the signed P&L, proof the preparer is licensed or active, and your two or three most recent months of account statements to support it
• Income math: net income on the P&L divided by the months it covers, times your ownership share
• Add-backs: depreciation, depletion, amortization and casualty losses on the P&L can be added back
• Ownership: at least 50% of the business on select programs
• Down payment: from 20%; P&L programs generally cap the loan at 80% of the purchase price
• Credit score: from 660

Who qualifies

Starting points across our program shelf, not promises; every file is underwritten individually, and guidelines (current as of October 2026) change:

• History: 2 years in business typically; 1 year can work with prior experience in the same line of work
• Ownership: typically 25% or more of the business for statement-based programs; select P&L programs want 50%
• Credit score: from 620 on select programs for bank statements and 660 for 1099s or a P&L; 10% down on bank statements needs roughly 700+
• Deposits: consistent and explainable; large unexplained deposits get questioned on any alternative-documentation loan

Seasonal or uneven income

From Grand Rapids contractors to lakeshore and up-north seasonal businesses, Michigan self-employment rarely pays in even monthly installments. Tax returns, bank statements, 1099s and P&Ls are all averaged over a year or two, so one slow winter doesn’t set your income on its own, though your most recent months still need to look consistent with the average. Two habits help any of them: business and personal banking kept separate for at least a year, and a short written explanation ready for anything unusual, like a slow season, a large equipment sale or a one-off contract.

What it costs

• Tax-return loans: standard conventional, FHA or VA pricing; the cheapest route when your returns support the payment
• Alternative documentation (statements, 1099s or a P&L): typically a somewhat higher rate and a larger down payment, with the premium shrinking as credit score and down payment rise
• The bridge strategy: buy on alternative documentation now, and refinance once a tax year or two supports a conventional loan, if the numbers favor it

How to get started with Priority Home Mortgage

Bring us the plain-English version of your business: what you do, roughly what flows through your accounts, what your returns show, and whether you’re paid on 1099s. We’re a direct lender based in Grand Rapids and licensed across Michigan, and we’ll price the tax-return path and the alternative paths side by side. If your returns get you there cheaper, we’ll say so. Start with a quick quote or the form on this page.

Guides on this topic

• A Complete Guide to Truck Driver Loans: Securing Your Dream Home
• When a Grand Rapids Lender Says No: Why a Mortgage Second Opinion Can Matter

Self-Employed and 1099 Mortgages in Michigan: your questions, answered

Can self-employed people get a regular conventional mortgage?

Absolutely. Self-employment doesn't disqualify you from anything. Conventional loans use the net income on your last one to two years of tax returns, averaged, with non-cash deductions such as depreciation added back. The problem is that healthy write-offs shrink that net number, so a business earning well can look modest on paper. The alternative-documentation paths on this page exist for exactly that gap.

Can I get a mortgage with only 1099 income?

Yes. A 1099-only mortgage qualifies independent contractors and commission earners on one or two years of 1099s instead of tax returns. Your 1099 total is averaged over 12 or 24 months and reduced by an expense factor, either a flat 10% on select programs or your actual expenses from a professionally prepared P&L, and an IRS transcript confirms the forms. Expect to put at least 20% down.

What is a P&L-only mortgage, and who has to prepare the P&L?

It qualifies a business owner on a 12- or 24-month profit-and-loss statement instead of tax returns. The P&L must be prepared and signed by a CPA or an IRS enrolled agent (a few programs accept other registered preparers; a PTIN alone doesn't qualify), and your two or three most recent months of account statements support it. Qualifying income is the P&L's net income divided by the months it covers, times your ownership share. Expect to put at least 20% down.

Which deductions get added back to my income?

Depreciation, depletion and amortization are paper expenses that never left your account, and a casualty loss is a one-time hit that won't recur, so underwriters can add them back to your net income on tax returns, and on the P&L for select programs. For a business that owns equipment, vehicles or a building, the add-backs can move qualifying income meaningfully. Bring your returns and we'll show you the adjusted number.

I've been self-employed less than two years. Do I have options?

Sometimes. If you have at least one year of self-employment plus prior W-2 experience in the same field, some programs will consider it. Alternatives include qualifying on a co-borrower's W-2 income, waiting for a second business tax year, or an asset-based program if you have significant savings. It's file-by-file, and worth a conversation before assuming you're stuck.

Will writing off less on my taxes help me qualify for more?

For conventional loans, yes: higher net income on your returns means more buying power, at the price of a bigger tax bill. That trade-off is worth modeling with your CPA a year or two before you plan to buy. Alternative-documentation loans sidestep the dilemma by not using your tax returns at all.