You've walked dozens of buyers through pre-approval, then a lender looks at your own tax return and acts like you barely work. Your gross commission income was strong, but after the brokerage split, MLS dues, the car, the photographer, the signs and the client gifts, your Schedule C looks thin. Getting a mortgage for real estate agents shouldn't feel harder than getting one for your clients, but with a traditional lender it often does.
The good news: lenders have more than one way to read commission income. The trick is matching the way you actually earn money to the program that measures it fairly.
Key takeaways
- Most agents are paid as 1099 independent contractors, so lenders treat you as self-employed even if you never formed a company.
- Conventional underwriting usually starts from your net Schedule C income, which is where marketing, mileage and other write-offs hurt you.
- Non-QM options like 1099 income loans, bank statement loans and P&L loans can measure income closer to what you actually bring in.
- Lumpy closings are normal. Lenders average income over a window, so a slow quarter isn't automatically a deal-breaker.
- Non-QM pricing is typically higher than conventional, so it's worth comparing both paths before you choose.
Why agents get tripped up on their own mortgage
You know the loan process from the outside. From the inside, the issue is simple: a conventional lender qualifies you on taxable income, not gross commission. And as an agent, you're probably very good at reducing taxable income.
Think about what comes off the top before anything hits your return:
- Brokerage split and desk or franchise fees. Whether it's a split, a cap, or a flat monthly fee, it never reaches your pocket.
- Vehicle expenses. Mileage between showings adds up fast, and the mileage deduction can be one of the biggest numbers on your return.
- Marketing. Listing photos, video, staging, mailers, social ads, sign riders and open house costs.
- Dues and tech. Association and MLS dues, lockbox fees, CRM subscriptions, transaction management software.
- Client gifts, education and licensing.
Every one of those is a legitimate business decision you made with your CPA. Together they can turn a strong gross into a modest net, and that net is the number a conventional underwriter uses. We cover this dynamic in more depth in our guide on whether tax write-offs affect your mortgage. The short version: smart tax strategy and easy mortgage qualifying often pull in opposite directions.
How lenders view commission income
Agents tend to fall into one of three buckets, and the bucket matters.
1099 independent contractor (most agents)
If your brokerage sends you a 1099-NEC at year-end, you're self-employed in a lender's eyes. Conventional lenders typically want two years of self-employment history and your full personal tax returns, then they average your Schedule C net income. A big drop between years can trigger extra scrutiny, or a lender may use only the lower year.
Agents with an LLC or S-corp
Some agents route commissions through a company and pay themselves a salary plus distributions. That can help on taxes but adds a layer: the lender may want business returns, K-1s and proof of ownership. Expect the lender to piece that income together from both the business and personal side.
Salaried or W-2 agents
A smaller group works on salary plus bonus, often at builder sales offices or teams that employ assistants. If most of your pay is W-2, standard documentation may work fine, though variable commission or bonus income still usually needs a history behind it.
Your mortgage options as a real estate agent
Here's where a broker earns their keep. Instead of forcing your file into one box, we look at which program reads your income most accurately and which trade-offs you're comfortable with.
| Program | What it uses to calculate income | Good fit when... | Trade-offs to know |
|---|---|---|---|
| Conventional / agency | Net income from personal (and possibly business) tax returns, usually averaged | Your returns show strong net income after write-offs | Write-offs reduce qualifying income; usually two years of history |
| 1099 income loan | Gross 1099 earnings minus a lender-applied expense factor | You're paid on 1099s and your deductions are large | Pricing is typically higher than conventional; expense factor varies by lender |
| Bank statement loan | Deposits over a 12- or 24-month window, less an expense factor for business accounts | You have several income streams or 1099s don't capture everything | More documentation of deposits; larger down payment than many conventional loans |
| P&L loan | A profit and loss statement prepared or reviewed by a CPA, EA or tax preparer | Your books are clean and your real expenses are lower than your return implies | Preparer requirements vary; some lenders also request statements to support it |
None of these is automatically "best." A top producer with clean books and a modest expense profile might do great with a P&L loan. A newer agent paid entirely on 1099s might be better served by a 1099 program. If you're weighing the last two, our comparison of a P&L loan vs a bank statement loan breaks down the differences.
How a 1099 program reads your income
With many 1099 programs, the lender takes the gross amount on your 1099 forms and applies a standard expense factor instead of using your actual deductions. That factor varies by lender and program, and some lenders use a figure in the range of 10% for straightforward contractor income while others use more. The point is that your real deductions on Schedule C don't automatically drag the qualifying number down.
Some lenders accept a single year of 1099 history when the earnings are stable. If you're early in your career, read our guide to a 1099 mortgage with one year of history.
Illustrative example
Take a hypothetical agent named Dana, two years into the business.
- Gross commissions paid on 1099: $160,000
- Net income on Schedule C after split-related fees, mileage, marketing, dues: $58,000
On a conventional loan, the starting point is that $58,000 net figure.
On a 1099 program with a hypothetical 10% expense factor applied to gross:
- $160,000 x 0.90 = $144,000 per year
- $144,000 / 12 = $12,000 monthly qualifying income
On a bank statement program reviewing personal accounts where commissions land after the split, the lender may count qualifying deposits directly, after excluding transfers and one-off items.
Illustrative example — not an offer or a guarantee of qualifying income. Actual calculations, expense factors and eligibility vary by lender, program and your full profile.
The gap between those numbers is exactly why so many agents feel "under-qualified" when they aren't.
Your commissions say more than your Schedule C does. Let us run your numbers across 1099, bank statement and P&L programs side by side. See if you qualify →
Lumpy closings, slow quarters and new agents
Real estate income is seasonal and uneven. You might close four deals in May and none in January. Underwriters know this, which is why most programs average income over a window rather than looking at a single month.
Choosing the right look-back window
Bank statement programs commonly offer a 12-month or 24-month window. If the last year was your best ever, a 12-month window may present your income more accurately. If you had a slow stretch recently but a strong year before it, 24 months may smooth things out. Our article on choosing between 12- and 24-month bank statement loans gets into the details.
What if income dropped?
A dip from one year to the next is common when the market cools. Lenders will look at whether the decline is stabilizing or continuing. A short letter explaining the change, plus current-year activity like pending contracts or year-to-date commissions, can help an underwriter understand the story. No program ignores a sharp decline entirely, so honesty up front beats surprises later.
Brand-new agents
If you've been licensed for only a few months, options get thinner. Many self-employed programs want at least a year or two of history in the field. Some lenders will consider a shorter history if you were in a closely related role before, like working as a licensed assistant, a loan officer or a property manager. It depends heavily on the lender and the rest of your file, and not everyone will qualify early on. If that's you, talk to us about what your prior experience might count for.
Documents real estate agents should gather
Regardless of program, you'll move faster if you have these ready:
- 1099-NEC forms from your brokerage for the period being reviewed.
- Personal tax returns (helpful even for non-QM, since some programs use them for history or comparison).
- Bank statements for the accounts where commissions are deposited, all pages.
- Proof of license and, if applicable, your business entity documents.
- Year-to-date commission statement from your brokerage or a list of closed and pending transactions.
- A profit and loss statement, if you're pursuing a P&L program, prepared or reviewed by an eligible preparer.
- Explanation letters for large non-commission deposits, gaps or changes in brokerage.
Do lenders call your clients or brokerage?
This comes up a lot, and it's a fair worry when your reputation is your business. In general, lenders verify that your business exists and that you're actively licensed. That might mean checking your license online, confirming with your brokerage, or reviewing a CPA or tax preparer letter. Lenders don't typically contact your buyers or sellers. They do need to verify income and employment, and they'll usually reconfirm shortly before closing, so let your broker or office manager know a request may come in.
The trade-offs, said plainly
Non-QM loans solve a real problem, but they aren't free.
- Pricing is typically higher than conventional. The lender is taking on a loan that can't be sold to the agencies, and that risk is priced in.
- Down payment and reserve requirements are often larger than many conventional loans.
- Some lenders charge more for a lower credit score or limit options for certain property types.
That's why we always look at conventional first if your returns support it. If they don't, a non-QM loan can be a bridge. Many borrowers later explore refinancing once their tax returns tell a stronger story, though nothing about future rates or eligibility is ever certain.
Working with a mortgage broker when you're in the business
You know the value of the right referral. As an independent broker, Matador Lending works with a large network of wholesale lenders, which means we can compare how different lenders treat commission income, expense factors and look-back windows instead of pitching a single program.
And yes, it goes both ways. If you have buyers who are self-employed, 1099 or business owners struggling to get approved, we're happy to be a resource for them too, and we'll keep you in the loop on your clients' files.
Frequently asked questions
Q: Can a real estate agent get a mortgage with one year of self-employment?
A: Sometimes. Some 1099 and bank statement programs consider a shorter history, especially if you came from a related field or your earnings are steady. Conventional loans typically want two years, so your options depend on the lender and your overall profile.
Q: Do lenders use gross commission or net income for agents?
A: Conventional lenders generally use net income from your tax returns. Non-QM programs may use gross 1099 earnings less an expense factor, qualifying bank deposits, or a P&L, which can result in a different qualifying income figure.
Q: Will my brokerage split be counted as an expense?
A: It depends on how you're paid. If commissions are paid to you after the split, the lender only sees your share. If the full commission flows to you and you pay the brokerage, the split will show as an expense on your books and deposits.
Q: Can I buy a home while I'm switching brokerages?
A: Often yes, but it can add questions. Changing brokerages doesn't change your line of work, so many lenders view it as continuity. Expect to provide documentation from both brokerages and possibly a short letter explaining the move.
Q: Is a bank statement loan or a 1099 loan better for realtors?
A: A 1099 loan tends to fit agents who are paid cleanly on 1099s by one or two brokerages. A bank statement loan can fit when income comes from multiple sources or 1099s don't reflect everything. Running both scenarios is the best way to decide.
Q: Can I use my own commission toward my purchase?
A: Rules vary by lender and program. Some lenders allow it if it's disclosed on the contract and settlement statement, while others restrict how it can be applied. Raise it early so your lender can confirm how they'll treat it.
Let's get you your own keys
You spend your days making other people's moves happen. Your own purchase deserves a lender who understands that a 1099, a split and a pile of legitimate write-offs don't mean you can't afford a home.
Tell us how you're paid, what your last couple of years looked like, and what you're hoping to buy. We'll show you which programs fit, what each one would require, and the honest trade-offs of each.
See if you qualify → — no credit pull to check your options. Prefer to talk? Call or text 713-366-4668.
This article is general education, not tax, legal, or financial advice, and not a commitment to lend. Loan programs, guidelines, and availability vary by lender and state and change without notice. Non-QM loans are subject to credit approval, income and asset verification, and appraisal. Talk with your CPA about tax questions. Small Business Mortgages is a marketing brand of Matador Lending, NMLS #2072896. Equal Housing Opportunity.