Kansas 1099 Loans: Empowering Contractors and Self-Employed Workers to Qualify

Understanding the 1099 Income Challenge in Traditional Lending

Across Kansas, thousands of hardworking professionals—contractors, gig workers, real estate agents, and consultants—form the backbone of the state’s entrepreneurial economy. Yet, despite their strong income and consistent work histories, these self-employed individuals often face steep barriers when applying for traditional mortgage loans.

Why? Because traditional lenders heavily favor borrowers with W-2 income, steady payroll deposits, and tax returns that paint a consistent, predictable financial picture. Unfortunately, 1099 workers—who may deduct business expenses or have fluctuating monthly revenue—often appear riskier to underwriters, even when their net income is strong.

For example, a Kansas-based handyman may earn $100,000 annually but write off $40,000 in expenses. To a conventional lender, he only “makes” $60,000, which may not be enough to qualify. These outdated rules leave many self-employed Kansans without viable mortgage options, even when they are more than capable of handling a monthly payment.

What Are 1099 Loans? A Non QM Lending Solution

1099 loans are part of the growing category of Non QM Loans, which are mortgages that don’t follow the traditional Qualified Mortgage guidelines. These loans were created to address the needs of borrowers who fall outside the standard underwriting box, especially those who earn income in non-traditional ways.

Rather than focusing strictly on tax returns, 1099 loans allow self-employed borrowers to qualify using their 1099 forms from the past one or two years. Some programs even accept year-to-date profit and loss statements, CPA letters, or business bank statements to validate income.

This flexible approach helps Kansas contractors, freelancers, and small business owners demonstrate their true earning power without being penalized for taking legitimate deductions or structuring their finances efficiently for tax purposes.

Borrowers may also choose from different repayment structures such as interest-only options, fixed-rate terms, or hybrid ARM programs, giving them greater control over cash flow.

To learn more about these documentation types, check out our Bank Statement and P&L Loan page.

Key Features of Kansas 1099 Loan Programs

Here are some of the standard features borrowers in Kansas can expect when applying for a 1099 loan through a Non QM lender like NQM Funding:

• Loan amounts up to $3 million

• LTV up to 90% (10% down payment minimum on primary homes)

• Minimum FICO score of 620

• No mortgage insurance (even above 80% LTV)

• Flexible debt-to-income (DTI) limits, often up to 50%

• Available for purchases, cash-out refinances, or rate/term refis

• Eligible for primary, secondary, and investment properties

• Interest-only payment options available

• Multiple income documentation options including:

  • 1099s from the past 1–2 years

  • P&L statements (CPA-prepared or self-prepared)

  • 12 or 24 months of personal or business bank statements

These options empower self-employed borrowers across Kansas to qualify based on how they actually earn and spend money, rather than forcing them into a narrow tax-return-based framework.

Who Can Benefit from 1099 Loans in Kansas?

1099 loans are a perfect fit for a wide variety of Kansas workers, including:

• Independent contractors in construction, HVAC, or remodeling

• Real estate agents, brokers, and leasing professionals

• Rideshare and delivery drivers (Uber, Lyft, Instacart, etc.)

• Freelance digital marketers, designers, and developers

• Agricultural consultants and ranchers

• Healthcare professionals operating private practices

• Artists, musicians, and self-publishing authors

These borrowers often maintain strong income and financial discipline but don’t have the standard income proof that traditional lenders demand.

Whether you’re based in Wichita, Overland Park, Kansas City, or a rural area, you can take advantage of these flexible programs.

Real Estate Market Trends Across Kansas for Self-Employed Buyers

Kansas offers one of the most affordable and stable housing markets in the country. Here’s a breakdown of a few notable cities:

• Wichita: Home to a growing aerospace and manufacturing industry, Wichita’s median home price hovers around $220,000. The city is ideal for first-time homebuyers, tradespeople, and those looking to enter the market affordably.

• Overland Park: A suburb of Kansas City, Overland Park has higher home values (median ~$430,000) but strong rental demand and appreciation trends. It’s a prime target for self-employed professionals with higher income or those purchasing investment properties.

• Topeka: As the state capital, Topeka offers great values for multi-unit and mixed-use properties. Median prices sit near $180,000, making it attractive for cash-flow-focused investors using DSCR or 1099 loans.

• Lawrence: A college town with high rental turnover, ideal for investors and side-income earners.

• Hays and Manhattan: Rural markets that still present stable appreciation with lower entry points for self-employed buyers.

The diversity of Kansas markets allows 1099 borrowers to choose between affordable entry-level housing, lucrative rental properties, or spacious suburban homes—all under lending programs tailored to their income type.

Why Loan Officers in Kansas Should Offer 1099 Loan Programs

As a mortgage broker or loan officer, offering 1099 loans can open a significant revenue stream. Kansas has over 200,000 self-employed individuals—many of whom have been denied or discouraged by conventional banks. By presenting a solution that aligns with how these professionals actually operate, you become an invaluable resource.

Here are a few ways to promote 1099 loans effectively:

• Partner with CPAs and tax preparers to refer clients whose income is misrepresented by their tax returns.

• Host local seminars or webinars on “Mortgage Options for the Self-Employed” in cities like Manhattan, Salina, or Olathe.

• Work with real estate agents who specialize in small business clients, gig workers, or first-time buyers.

• Connect with coworking spaces and small business associations to provide workshops.

• Use tools like the Quick Quote form to streamline prequalifications for your self-employed prospects.

Loan officers can also build long-term client relationships by offering annual mortgage checkups, refinancing options when rates drop, or assisting clients in scaling from primary residences to investment properties. Education and consistent communication will differentiate you in this niche market.

Kansas-Specific Lending Considerations

While Kansas does not impose specific restrictions on 1099 loan products, it’s important to note the benefits that borrowers in the state enjoy:

• No state-level overlays or prohibitions on Non QM products

• Clear title and escrow processes in most counties

• Competitive property insurance and tax rates

Moreover, NQM Funding confirms that Kansas is a fully eligible state for its 1099, Bank Statement, and Foreign National loan products. This differentiates Kansas from states like Nevada, Minnesota, North Dakota, Utah, and Oregon—where these loans may not be available.

Kansas also has many counties where affordability still reigns supreme. Areas such as Cowley, Montgomery, and Crawford counties offer homeownership opportunities for self-employed buyers at price points under $150,000, making them excellent matches for borrowers with moderate 1099 income.

Alternative Documentation Programs for Kansas Borrowers

Not all self-employed borrowers receive 1099s. Some are paid directly into bank accounts or manage multiple income streams that aren’t easily captured on a single form. That’s where other Non QM documentation types can help, including:

• Bank Statement Loans: Use 12 or 24 months of personal/business deposits to calculate monthly income.

• Profit and Loss Only: Rely solely on a CPA-prepared P&L statement without the need for tax returns.

• Asset Utilization: Convert qualifying liquid assets into monthly income.

• ITIN Loans: For borrowers without a Social Security number but with valid tax ID.

These options provide flexibility for borrowers who have seasonal income, large deposits from consulting work, or asset-based wealth that does not show up on a pay stub.

Explore these options further on our ITIN and Foreign National Loan page.

Putting It All Together: 1099 Loans Help Kansas Borrowers Succeed

With strong demand in the housing market and a growing independent workforce, Kansas is uniquely positioned to benefit from flexible mortgage programs like 1099 loans. These solutions remove the barriers that prevent creditworthy self-employed professionals from owning or refinancing homes.

Scenario: A freelance software developer in Kansas City brings in $150,000 per year via contract work but only shows $70,000 in taxable income due to business deductions. Using a traditional loan, he’s denied a mortgage. With a 1099 loan from NQM Funding, he’s approved based on his actual gross income from 1099s and a CPA-verified P&L.

Scenario: A couple in Overland Park runs a home-based catering business. With fluctuating income and no W-2s, they qualify for a home using 24 months of business bank statements, locking in competitive terms and no MI.

Scenario: A self-employed real estate photographer in Lawrence is looking to buy her first investment property. Her average monthly deposits exceed $8,000, but she shows minimal net income after deductions. A bank statement loan allows her to qualify and begin building long-term wealth.

Rather than relying on outdated income criteria, NQM Funding and other Non QM Lenders are helping loan officers offer smarter alternatives. Whether you’re helping a Wichita handyman buy his first home or a Kansas City freelancer invest in a duplex, 1099 loans give you the tools to close more deals and serve more people.

Visit NQMF.com today to connect with our experienced Non QM underwriting team or launch a loan scenario through our Quick Quote tool. Let’s make homeownership possible for the workers building Kansas from the ground up.