Self-Employed Purchase Programs

1099 and self-employed borrowers do not qualify the same way W-2 borrowers do. TAG offers two purchase paths: an FHA 2-4 unit option for owner-occupants, and an alternative documentation option that may fit when tax returns do not tell the full income story. Loan officers match the borrower to the right path based on occupancy, income documentation, credit, assets and property.

Path 1: FHA 2-4 Unit (House Hack)

3.5% minimum down payment for eligible FHA borrowers.
Purchase a 2, 3 or 4 unit property and live in one unit while renting the others.
Borrower must occupy the property as a primary residence, generally for at least 12 months.
Self-employed and 1099 income is documented with tax returns and supporting business documents.

Path 2: Alt Doc Purchase

Designed for self-employed borrowers whose tax returns understate their true cash flow.
Income may be documented with bank statements, 1099s or a profit and loss statement, depending on the investor program.
Down payment, reserves and eligibility vary by investor program and are reviewed per scenario.
Can be a fit for owner-occupied or investment purchases, subject to program guidelines.

Documents We Typically Review

Income

1099 forms and business or personal tax returns, typically 1 to 2 years.
Year-to-date profit and loss statement, when required.
Business bank statements, for alt doc programs that use them.

Assets & Property

Bank or investment statements, typically 2 months, to document the down payment, closing costs and reserves.
Purchase contract and property details, including unit count and expected rental income for 2-4 unit purchases.
Government-issued ID and credit authorization.

Business expense write-offs can lower the income that qualifies on a tax-return program. If that is your situation, an alt doc path may be worth reviewing with a loan officer.

Which Path Fits?

Buying a duplex, triplex or fourplex and moving into one unit: start with FHA 2-4 unit.
Putting down the minimum and income shows well on tax returns: start with FHA 2-4 unit.

Tax returns show heavy write-offs that understate income: review alt doc.
Buying a property you will not occupy: review alt doc or DSCR, since the FHA 3.5% down option requires owner occupancy.

Need Help Structuring a Self-Employed Purchase?

Connect with a loan officer to review your income documentation, occupancy plan and best-fit program.

Connect To A Loan Officer

Program availability, terms and eligibility are subject to investor guidelines and borrower qualification. This is not a commitment to lend. Not all borrowers will qualify. Not available in all states. NMLS #2329372. Equal Housing Opportunity.

Self-Employed Purchase FAQs

Straight answers on 1099 and self-employed purchase financing. Last reviewed November 2026.

Can I buy an investment property with 3.5% down using 1099 income?

Not a pure non-owner-occupied investment property. The FHA minimum down payment of 3.5% requires you to occupy the property as your primary residence. A 2-4 unit purchase where you live in one unit and rent the others can qualify. If you will not live in the property, an alt doc or DSCR investor program may be a better fit, and the down payment is set by the investor program.

How is 1099 or self-employed income counted?

Lenders typically review 1099 forms and tax returns, and on alt doc programs they may use bank statements or a profit and loss statement instead. FHA generally looks for an established self-employment history, commonly two years, with documented exceptions. Alt doc programs set their own documentation rules by investor.

Do business write-offs hurt my ability to qualify?

They can. On tax-return programs, qualifying income is generally based on net income after deductions, so heavy write-offs lower the income a lender can use. Alt doc programs that qualify with bank statements look at cash flow instead, which can change the picture.

What does the FHA 2-4 unit house hack require?

You buy a duplex, triplex or fourplex and live in one unit as your primary residence, generally for at least one year, while renting the others. FHA applies additional requirements to 3-4 unit properties, which a loan officer will review with you for your scenario.

What assets and documents will I need?

Plan on 1099s and tax returns, typically 1 to 2 years, a profit and loss statement when required, and about 2 months of bank or investment statements to document the down payment, closing costs and reserves. Reserve requirements vary by program and property.

What is the difference between the FHA 2-4 unit path and the alt doc path?

FHA 2-4 unit is built for owner-occupants who qualify on tax-return income. Alt doc is for self-employed borrowers whose returns understate their cash flow, and eligibility, down payment and reserves vary by investor program. A loan officer can match you to the right path.

Where is this available?

Availability varies by state. TAG Lending Group is licensed as a lender in FL, SC, TN, TX, GA, MI, NM and OH, and as a mortgage broker only in CT, PA and NJ. NMLS #2329372.

Sources

General information only, not a commitment to lend, legal advice or financial advice. Program availability, terms and eligibility are subject to investor guidelines and borrower qualification. Equal Housing Opportunity.

SELF-EMPLOYED PURCHASEFHA 2-4 UNIT & ALT DOC