How Much Down Payment Does a 1099-Only Loan on Single-Family Properties Need?

The Quick Read: It depends on occupancy: a primary residence can reach up to 90% loan-to-value (LTV) on a purchase, which means roughly 10% down at the top tier, while an investment-property cash-out tops out around 75% LTV and a rental purchase on 1099 documentation varies by lender. The 1099 itself does not set the number. The leverage grid does, and the grid depends on how you will use the house. All of this is subject to lender guidelines and is not a commitment to lend.

• Down payment equals 100% minus the LTV the lender allows. A 90% LTV means 10% down.
• Owner-occupied cash-out on a primary residence or second home runs up to 80% LTV. Investment-property cash-out tops out around 75% LTV.
• A single-family rental purchase on 1099 documentation has no single network-wide number. It varies by lender, credit, experience and loan size.
• Reserves, typically around 6 months of the housing payment, sit on top of the down payment. They do not replace it.
• If you are buying a rental, a loan that is reviewed on the property’s rent may fit better than one that is reviewed on your 1099 income.

Why “1099-Only Loan” Does Not Mean One Product

A 1099-only loan is a label, not a standard program. It describes a non-QM loan, which is a mortgage that sits outside agency standards, where the lender reviews your file on 1099 income instead of W-2s and traditional personal-income documentation. Each lender writes its own program sheet.

Underwriting is not skipped. Scotsman Guide reports that 1099 forms are sometimes matched against IRS transcripts. A reviewer still checks your assets, your credit and where your down payment came from.

Lendmire is a mortgage broker. It arranges these files through select lenders in its wholesale network and does not set the grid itself. That view across many lenders is why the honest answer here is a structure, not a single figure.

What Actually Sets Your Down Payment

The lender’s maximum LTV sets it. LTV is the loan amount divided by the lesser of the purchase price or the appraised value. Your down payment is whatever the loan does not cover, plus any gap if the appraisal comes in under the price.

Five things move that maximum on most programs:

• Occupancy. A primary residence gets the highest leverage. A second home gets less. An investment property gets the least.
• Purchase versus cash-out. Cash-out ceilings sit below purchase ceilings.
• Credit tier. Stronger scores and cleaner housing history earn more LTV.
• Loan size. Larger balances usually tighten the grid.
• Documentation strength. Steady, well-documented income with a long history earns more leverage than volatile income with a short one.

Market-wide, Scotsman Guide reports that non-QM loans average an LTV of around 70%. That figure blends every property type and occupancy. It is a market average, not an investment-property ceiling. Within the wholesale network Lendmire works with, the ceilings depend on the occupancy and transaction type shown in the next section.

The Leverage Grid by Occupancy

The table shows the network’s typical ceilings on alt-doc files, meaning loans that qualify on documented income under the applicable program, subject to lender guidelines. Individual lenders vary, and every file is underwritten on its own.

Read the 90% row carefully. It belongs to a primary residence only. Stronger files earn the top of the range, and weaker files land lower. It does not describe a rental.

Asset depletion is a different way to qualify. The lender looks at your liquid assets instead of income deposits. On a primary residence, it can reach about 80% LTV. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.

What a Single-Family Rental Needs

Plan on bringing noticeably more cash than you would for a primary home. Investment-property purchases on bank statement or 1099 documentation vary by lender, so a single network-wide percentage would mislead you. The strongest leverage tends to go to borrowers with solid credit, a proven landlord record and a well-documented file.

Single-family houses are the most straightforward property type in these programs. They appraise cleanly, and the appraiser adds a rent schedule when the house is a rental. Condos, rural parcels, non-warrantable buildings and very large balances usually tighten leverage. A single-family house avoids most of those penalties.

Loan sizes in this lane run roughly $125,000 to $3,500,000. Reserves commonly land around 6 months of the housing payment. Treat reserves as cash you also need to have, not as a way to shrink the down payment.

Market-wide, investment-property lending asks for noticeably more cash down than owner-occupied lending. Treat that as direction, not a quote. The exact percentage comes from the lender’s grid at the time of your file.

Is the Loan on a Rental or on a Home You Will Live In?

Occupancy decides which rulebook applies, and that changes your cash needs. A loan on a home you will live in, whether a primary residence or a second home, is a consumer mortgage. Standard consumer disclosures apply, including TRID, the Loan Estimate and Closing Disclosure process. A full review of your ability to repay applies too.

A loan on a non-owner-occupied rental, including a short-term rental, is a business-purpose investor loan. It is reviewed differently and is exempt from TRID. The Federal Register rulemaking on ability-to-repay says business-purpose and investment-purpose loans fall outside those consumer rules. The CFPB’s Truth in Lending summary lists business-purpose credit among the exempt transactions.

Here is the catch. Neither regime sets a minimum down payment. Leverage limits come from each lender’s and investor’s appetite for risk, which is why they differ so much from program to program.

Declaring occupancy honestly matters. A cash-out that you plan to spend on personal needs can lose its business-purpose treatment. Do not pick the label that gives you the best leverage.

The Mistake Behind “1099 Loans Need Only 10% Down”

Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.

That headline number is typically a primary-residence figure. It does not carry over to a rental.

Primary-residence 1099 and bank statement programs can reach up to 90% LTV on a purchase, which is roughly 10% down at the top tier. A rental purchase on the same documentation generally requires more equity than that. Anyone quoting 10% down for a rental is either describing a different property or leaving out conditions.

Picture an investor who qualifies for the top-tier primary-residence grid and assumes it follows them to a rental across town. The lender reviews the new file as an investment property. The leverage drops, and the cash needed to close goes up. Check the occupancy line first, before you plan around any percentage.

1099 Income, Bank Statements or Rent: Which Route Fits?

A self-employed investor on a single-family rental has three real documentation paths. They underwrite different things.

A bank statement loan uses 12 months of business or personal statements. Qualifying income comes from your deposit averages after the lender applies an expense factor. Expense factors differ by lender, so no formula applies everywhere.

A DSCR loan, short for debt service coverage ratio loan, is built for non-owner-occupied rentals. It compares the property’s rent with its full monthly obligation, which is principal, interest, taxes, insurance and any HOA dues. Because it qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, each new rental stands on its own. Lendmire’s complete DSCR loans guide walks through that route.

The 1099 route stacks every new loan on your personal income. A DSCR route does not. That is the practical reason many self-employed buyers move to DSCR once they are buying rentals, not homes. HousingWire describes non-QM as a toolbox that includes both 1099 income loans and DSCR, and that is how brokers use it.

Experience from the broker’s side: self-employed borrowers with heavy write-offs often show thin taxable income but strong gross deposits or strong rent. The best file is usually the one that documents whichever number is strongest and cleanest. That choice changes the leverage you are offered, so run the same property through two routes before committing.

Where the Down Payment Money Can Come From

Lenders verify the source of your funds through asset statements. Savings, the sale of an asset and business funds you can document all appear on real files. What causes trouble is anything that looks unexplained.

• Large deposits. A big deposit with no paper trail invites questions. Keep records for any transfer.
• Mixed accounts. Business and personal money in one account makes sourcing harder to show.
• Borrowed funds. Whether a HELOC draw can count is program-specific. Confirm that before you rely on it.
• Gift funds. Rules depend on occupancy and the program. Gifts are far more common on primary residences than on rentals.

Tax treatment can depend on how the funds are used and how the property is held. Investors should keep clear records and speak with a qualified tax professional before relying on any deduction.

Levers That Can Reduce the Cash You Need

You cannot negotiate the grid, but you can change where your file lands on it.

1. Raise the credit tier. Pay down revolving balances before you apply. A higher tier can raise the maximum LTV.

2. Strengthen the documentation. A longer, steadier deposit or 1099 history earns more leverage than a short, volatile one.

3. Choose the right occupancy. If you will truly live in the home, a primary-residence file can allow more leverage than a rental. Occupancy must be real.

4. Consider the route. A rental that covers its payment well can make a DSCR file stronger than a 1099 file on the same house.

5. Keep loan size reasonable. Larger balances tighten the grid, so a modest purchase can mean less cash.

6. Hold your reserves. Reserves do not cut the down payment, but a thin reserve position can cost you leverage.

Every lever has a trade-off, and lenders weigh them together.

A Pre-Application Checklist

Start six to twelve months before you plan to buy if you can.

• Keep business and personal accounts separate.
• Document every large deposit and transfer.
• Pull your 1099s and know which payers and form types appear.
• Decide whether the property is a rental or a home you will live in, and be able to say so plainly.
• Hold cash for the down payment, closing costs and reserves in one seasoned account.
• Ask a broker to compare 1099, bank statement and DSCR options on the same property.

For a deeper walk through the paperwork, see Lendmire’s piece How to Qualify for a 1099-Only Loan on Single-Family Properties.

Key Terms Defined

LTV (loan-to-value): The loan amount divided by the lesser of the price or the appraised value. Your down payment is 100% minus this number.

1099-only loan: A non-QM mortgage that is reviewed around 1099 income rather than W-2s and traditional personal-income documentation, under the lender’s program sheet.

Bank statement loan: A mortgage that is reviewed around average deposits over 12 months of business or personal statements, after a lender expense factor.

Non-QM: A mortgage that sits outside agency standards, so each lender sets its own documentation and leverage rules.

Business-purpose loan: A loan on a property you will not live in, made to run as a rental or investment.

Reserves: Liquid cash you must hold after closing, typically around 6 months of the housing payment on these programs.

Next Step

If you are self-employed and want to see how the numbers work, call 828-256-2183 or request a quote online. Lendmire can help you compare options based on your documentation, the property, credit profile, leverage, and your goals. Investors who start by asking which route fits the property usually spend less time guessing at percentages.

This article is general information, not legal or tax advice. Consult a qualified attorney or CPA about your own situation.

About Lendmire

Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.

References

1. Scotsman Guide – Careful underwriting

2. Scotsman Guide – Helping borrowers fit the boxes with non-QM

3. Federal Register – Ability-to-Repay and Qualified Mortgage Standards final rule

4. CFPB – Truth in Lending Act summary

5. HousingWire – Non-QM loans guide