Owner Occupied Condo. Mid 600s scores. 1099 contractor

[P. Martin]

I'd like to purchase a condo to use as my primary residence for ~80k. Last year I had a w2 job, but am now working as a 1099 contractor. Credit is mid 600s depending on where I am looking.  

Suggestions on how I could make this happen?

[Mindy Jensen]

This is a tough situation, @P. Martin. My husband and I are in a similar situation, but with a higher credit score. He has had the same job for the last 12 years, but circumstances changed and he is now a 1099 employee rather than a w-2. Every bank we have talked to has said the same thing, they need two years of tax returns from 1099 employment before they will even look at giving you a loan. We have extremely high credit scores, mid-800's and have used the same lender for the last 7 transactions and they cannot bend.

There are a few options I can think of: A co-signer, a credit union, family/friends lending you the money until you have the two years of tax returns.

If none of this is an option, I think you should concentrate on raising your credit score while you wait the two years. Have you gotten a copy of your credit report in the last 365 days? You are entitled to one every year, and it is good practice to check it out every year. You can make sure there isn't any incorrect information on the report that could be negatively effecting your score. 

Do you have a high debt-to-credit ratio? If so, concentrate on lowering those outstanding balances. Do you pay off your credit cards every month? Try having a small balance for a couple of months, and make sure you make the payment on time every month. That can knock your score, too.

Good luck!