Self-employed and 1099 mortgages in Georgia
By Alyson Foy, Loan Officer, Edge Home Finance, NMLS #448481 · 8 min read · Updated September 2026
Quick answer
Self-employed and 1099 borrowers in Georgia are usually qualified on net income after business deductions, not gross revenue, which is why a profitable business can support a smaller loan than the owner expects. Standard documentation is typically two years of personal returns, business returns when you own a large enough share, and a year-to-date profit and loss statement. When tax returns understate real cash flow because of aggressive write-offs, alternative documentation such as bank statement programs may fit instead. Availability may vary and all financing is subject to credit approval.
Key takeaways
- · Lenders generally use net income after deductions, not gross receipts
- · Two years of history is the common baseline, with exceptions in some cases
- · Heavy write-offs lower taxable income and therefore lower qualifying income
- · Bank statement options exist when returns do not reflect real cash flow
- · Talk to a lender before your next tax filing if you plan to buy soon
The write-off paradox
Good tax strategy and good mortgage qualification often pull in opposite directions. Deductions that legitimately reduce what you owe the IRS also reduce the income a lender can count.
A contractor grossing well into six figures who writes down to a modest net may qualify for far less than a salaried neighbor earning less on paper. This is not a loophole to exploit or a flaw to complain about, it is a timing issue. If a purchase is coming, it belongs in the conversation with your CPA before you file.
What standard documentation looks like
- · Two years of personal federal tax returns, all pages and schedules
- · Two years of business returns if you own 25 percent or more
- · Year-to-date profit and loss statement
- · Business license, CPA letter, or similar verification of ongoing operations
- · Two months of statements for each account, every page
How income is actually calculated
Lenders typically average your net business income across the documented period, then add back certain non-cash items such as depreciation. Declining income gets scrutinized more closely than rising income, and a sharp drop in the most recent year can lead to the lower figure being used.
Stability is the theme. Consistent or growing net income across two years is the smoothest path. Irregular years are workable but need explanation supported by documentation.
When alternative documentation fits
Some borrowers have strong, provable cash flow that tax returns simply do not reflect. Bank statement programs evaluate deposits over a period of months instead of relying on net taxable income.
These options usually come with different down payment, reserve, and pricing expectations than a conventional loan. They are a real tool for the right borrower rather than a default. Availability may vary.
Common situations in metro Atlanta
- · Independent contractors in construction, logistics, and the film industry
- · Real estate agents and other commission-only earners
- · Owners of a single-member LLC with a short but strong history
- · Gig and platform income mixed with part-time W-2 wages
- · Small business owners who recently changed entity structure
Preparing twelve months ahead
The self-employed buyers who have the easiest time are the ones who started the conversation a year early. That lead time allows you to coordinate filing strategy, clean up how business and personal funds are separated, and build documented reserves.
If you are closer than that, it is still worth a review. Knowing your real number before you shop is better than discovering it after you love a house.
Common questions
How long do I need to be self-employed to get a mortgage in Georgia?
Two years of history is the common baseline. Shorter histories are sometimes workable when there is related prior experience or other compensating strength, depending on the program. All financing is subject to credit approval.
Do lenders use my gross revenue or my net income?
Generally net income after business deductions, with certain add-backs such as depreciation. That is why gross receipts alone rarely predict how much you can borrow.
What is a bank statement loan?
It is an alternative documentation option that evaluates deposits over a set number of months rather than relying on net taxable income. It typically carries different down payment, reserve, and pricing expectations, and availability may vary.
Should I stop taking write-offs before I buy a home?
That is a decision to make with your CPA, weighing the tax cost against the borrowing benefit. The useful step is to raise it before you file rather than after, so both goals can be considered together.
Can I combine 1099 income with W-2 income?
Yes, mixed income is common and can be used when each source is documented. The documentation list simply gets longer, so starting early keeps the file moving.
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All loan scenarios are subject to credit approval, income and asset verification, and property eligibility. Program availability may vary and terms are subject to change. Nothing on this site is a commitment to lend, an offer of credit, or a rate quote. Consult Alyson for current options.
Self-employed and wondering what you actually qualify for? Let's review your numbers privately.
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