Buying a Home with an ITIN, Self-Employment or 1099 Income

Many hardworking people in Greater Boston do not fit the “W-2 paycheck” box that standard mortgages are built around. You may own a cleaning company, drive for yourself, work in construction on 1099s, run a small restaurant, or file taxes with an Individual Taxpayer Identification Number (ITIN). Homeownership is still possible. The path just looks a little different, and preparation matters more.

This guide explains the main loan options, which documents help most, what to expect for down payments, and how to protect yourself from scams.

Know your starting point

Lenders mainly want to answer two questions: Can you repay? and Can they document it? Federal ability-to-repay rules require mortgage lenders to make a reasonable, good-faith check that you can afford the loan. That is true for every type of loan, including the specialty loans described below.

Your options depend on:

• Whether you have a Social Security number or an ITIN
• How your income is reported on your tax returns
• How long you have been self-employed
• Your credit history, savings and down payment

If you are self-employed or paid on 1099s

Conventional and government loans

If you have a Social Security number and your tax returns show your income, you may qualify for regular loans like conventional, FHA or VA. Fannie Mae considers you self-employed if you own 25% or more of a business. It generally looks for a two-year history of self-employment income. A shorter history may be accepted if your most recent tax returns show at least 12 months of income from your current business and you previously earned similar income in the same line of work.

Lenders usually ask for your last two years of signed personal tax returns (and business returns, if you have them). In some cases, one year may be enough if your business has been open at least five years.

Bank statement loans

If your tax returns do not show your true earning power, a bank statement loan may help. These are “non-QM” (non-qualified mortgage) loans offered by private lenders. Instead of using tax returns, the lender reviews 12 or 24 months of personal or business bank statements to estimate your income.

• Down payments are usually larger than for standard loans. One lender’s June 2026 guide described typical ranges of about 10% to 25%, depending on credit and property type.
• Interest rates and fees are often higher than for conventional loans.
• Keep business and personal money in separate accounts and avoid large deposits you cannot explain.

If you file taxes with an ITIN

An ITIN is a tax number the IRS issues for federal tax purposes. It shows you file taxes; it does not give work authorization or Social Security benefits, and lenders cannot treat it as a substitute for other documents they are required to collect.

Here is what to know about the main loan types:

• FHA loans: Since May 25, 2025, HUD limits FHA loans to U.S. citizens, lawful permanent residents (green card holders) and citizens of a few Pacific nations with special agreements. Other borrowers are no longer eligible for FHA.
• Conventional loans: Fannie Mae has its own identification and residency documentation rules. Your lender will explain whether you fit them.
• ITIN loans: Many ITIN borrowers use specialty non-QM ITIN programs from private lenders. These loans are underwritten by each lender’s own rules.

As one real example, a national wholesale lender’s ITIN program (page updated August 2026) allowed up to 80% financing (so about 20% down), required a minimum credit score of 660, accepted an ITIN card or IRS ITIN letter plus a valid government photo ID, and required as little as three months of reserves. Other lenders have different rules, so compare more than one.

Documents that help

Whatever your situation, organized paperwork makes approval faster. Start gathering:

• Tax returns for the last two years, with all schedules, and IRS transcripts if requested
• ITIN letter or card and a valid government-issued photo ID (passport or similar), if applicable
• 12 to 24 months of bank statements, personal and business
• Business proof: licenses, registration with the state, a letter from your CPA or tax preparer, client contracts or 1099 forms
• Proof of rent payments (canceled checks or bank records) for the last 12 months or more
• Down payment records: where the money came from and how long it has been in your account

Building your credit history

If you have little or no credit history, start now. Good habits that help:

1. Open a secured credit card or small credit-builder account, and pay it in full each month.
2. Keep balances low compared with your limits.
3. Pay every bill on time, including phone and utilities.
4. Ask whether your landlord or a rent-reporting service can report your on-time rent.
5. Check your credit reports for errors and dispute any mistakes.

Our guide on credit and pre-approval goes deeper.

Protect yourself from scams

People with non-traditional income are often targeted by scammers. Watch for these warning signs:

• Anyone who “guarantees” approval before reviewing your documents
• Requests for large upfront fees in cash, by gift card or by wire before you have a written loan estimate
• Advice to list false income, a false job or someone else’s information on your application (this is mortgage fraud)
• Pressure to sign documents you do not understand, or that are only in a language you do not read

The Consumer Financial Protection Bureau also warns about closing wire fraud. Never follow wiring instructions sent by email. Call your attorney or settlement agent at a phone number you already know to confirm the account before sending any money. If you are a victim, call your bank right away to ask for a wire recall and file a report at ic3.gov.

Step by step

1. Meet with a lender (or two) who regularly works with self-employed or ITIN borrowers.
2. Collect your documents and work on your credit.
3. Save for a larger down payment, closing costs and reserves. See our guide to closing costs.
4. Get a written pre-approval before you shop.
5. Follow the normal Massachusetts process: offer, then Purchase and Sale Agreement, inspection and an attorney-led closing.

How Luis can help

Luis has worked with many self-employed and first-time buyers in Greater Boston for more than 30 years. Our team can connect you with lenders who understand your type of income and guide you through each step, in English or Spanish. Book a free 15-minute call to start.