At North Star Mortgage Network, we understand the diverse financial profiles of borrowers, especially those transitioning from W2 to 1099 income. Traditional mortgage programs often fail to accommodate the unique income structures of self-employed individuals and independent contractors. That’s why we offer a specialized 1099 Program tailored to meet the needs of these borrowers, providing flexible qualification criteria and streamlined documentation requirements.

What Sets Our 1099 Program Apart?

Our 1099 Program is designed to help independent contractors, freelancers, and self-employed professionals secure home financing with a simplified approach. Here’s how it stands out:

Eligibility Criteria

• Borrowers with a 2-year history of receiving 1099 income are eligible.
• Individuals who recently transitioned from W2 to 1099 and have maintained at least 1 year of 1099 income in the same line of work may also qualify.

Documentation Requirements

To verify income, borrowers must provide:

• 1099s for the most recent tax year (income paid to a business is not eligible).
• Oaktree applies a 15% expense factor to calculate qualifying income based on 1099s.
• Proof of income must include either:
  • Most recent 30-day paystubs or Year-to-Date Written Verification of Employment (WVOE).
  • Bank statements covering the current calendar year may supplement proof of income to demonstrate YTD income paid directly to the borrower.
• Current year income must support the previous year’s 1099 income to ensure financial stability.

Self-Employment Verification

Borrowers can verify their self-employment history through one of the following methods:

• A letter from a CPA or tax preparer confirming a 2-year employment history with the current 1099 employer.
• A letter from the 1099 employer verifying a 2-year contractor employment history.
• Third-party verification from Oaktree.

Special Considerations

One of the standout features of our program is an exception for borrowers who recently transitioned from wage income to 1099 with the same employer. This has been a game-changer for many of our clients!

To qualify for this exception, borrowers must provide:

• Proof of a continuous two-year employment history with unchanged job duties.
• At least two months of 1099 income proof.
• Supporting documentation, including 30-day paystubs, last two years of W2s/1099s, and WVOE.

Why Choose North Star Mortgage Network?

At North Star Mortgage Network, we specialize in helping self-employed individuals navigate the mortgage process with confidence. Our 1099 Program is designed to provide flexible solutions, ensuring that independent professionals can achieve homeownership without the traditional hurdles of income documentation.

If you’re a self-employed borrower or recently transitioned from W2 to 1099 income, contact us today to explore your mortgage options and take the next step toward homeownership!