1099 Only Programs Can Be for Either a 1-Year History or 2-Year History Verification
Borrower must have at least 1 year same self-employed industry company and a 2-year history as 1099. This works best for borrowers like a realtor who has been with ReMax for X (> 2years) years, for example.
Any industry if fine i.e. insurance sales, consultant, trade such as construction. If the borrower has been employed with the same company between one and two years, borrower can provide the 2019 1099 and YTD earnings statement for 2020, tax returns Form 4506-T not required. We can average 2019 and YTD 2020. If we add 2018 1099, we can average it over the whole year, not from the start date. Unless the borrower does not have a 2020 earnings statement (profit and loss statement, for example), then we can use bank statements for current year, we are better off just doing a bank statement loan this late in the year.
Underwriter Guideline highlights
- Multiple 1099's can be used, each with a two-year history.
- Current year business 1099 income may be substantiated with bank statement (most common) by way of P&L or earnings statement, paystub, or bank statements
- Most recent 1-year or 2 years required
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