Do lenders consider income that is not based on a W2

[Bret Middlekauff]

So I am looking for a mortgage. I currently have great credit, plenty of savings, and more than enough regular income to leverage this loan, however half of my income is from a 1099. I spoke with a lender and they would not take this income into consideration! Are there ways around this or lenders who will? Please help! On paper I can easily show the ability to cover the loan so I don't understand why it's not considered.

[Ryan Husser]

Hi Bret! 

The reason most lenders won't consider it is because it does not meet the Fannie Mae or Freddie Mac federal guidelines. Most big banks will sell the loan to one of these agencies. For 1099 income they usually need a 2 year history documented on your tax returns and then they average it out over those 24 months. 

Your best bet would be to look at smaller credit unions or banks who would have more flexible loan guidelines. These types of banks don't sell their loans to Fannie or Freddie and would keep them on their own balance sheet. This allows you to get an approved loan with more 'non-traditional' income. Hopefully this helps and good luck!